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EXHIBIT 99.(E)(3)
AMENDED AND RESTATED DISTRIBUTION CONTRACT
THIS AMENDED AND RESTATED DISTRIBUTION CONTRACT (this "Agreement"),
dated this ___ day of____________, 2001, between WM Variable Trust, a
Massachusetts business trust (the "Trust"), on behalf of each of its series
which are listed on the signature page of this Agreement (each a "Fund" and
collectively the "Funds"), and WM Funds Distributor, Inc., a Washington
corporation doing business at Gold River, California, herein sometimes referred
to as the "Distributor."
RECITALS
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and the Funds are separate series of the Trust;
WHEREAS, each Fund and the Distributor desire to enter into an agreement
that sets forth standard terms and conditions for distribution and other
services for Trust's Class 1 shares and Class 2 shares (collectively, the
"Shares"); the shareholders of each Fund are and will be separate accounts in
unit investment trust form ("Eligible Separate Accounts") of insurance
companies, portfolios holding interests in such Funds in connection with asset
allocation programs or qualified retirement plans ("Plans");
WHEREAS, variable annuity and insurance product ("Variable Products")
net premiums and considerations will be allocated to Eligible Separate Accounts
for investment in each Fund, and contributions of Plans will be invested in each
Fund;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT. The Trust hereby affirms the appointment of WM Funds
Distributor as the agent for distribution of Shares and grants the Distributor
the right to sell Shares on behalf of each Fund and on terms set forth in this
Agreement. The Distributor accepts such appointment and agrees to render the
services herein set forth for the payments herein provided (including
reimbursement of expenses).
2. CONFLICTS PROCEDURES. The Trust has approved a Memorandum of
"Procedures for Monitoring Potential Conflicts Among Shareholders" (the
"Procedures"). This Distribution Contract shall be subject to the provisions of
the Procedures, the terms of which are incorporated herein by reference, made a
part hereof and controlling. The Procedures may be amended or superseded,
without prior notice, and this Agreement shall be deemed amended to the extent
the Procedures are amended or superseded. The Distributor represents and
warrants that it will act in a manner consistent with such Procedures as so set
forth and as they may be amended or superseded, so long as it is the distributor
of the Shares. This provision shall survive the termination of this Agreement.
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3. PARTICIPATION AGREEMENTS. The Distributor is hereby authorized, from
time to time, to enter into separate written agreements ("Participation
Agreements" or, individually, a "Participation Agreement"), on terms and
conditions not inconsistent with this Agreement, with Plans and with insurance
companies which have Eligible Separate Accounts and which agree to participate
in the distribution of Trust Shares, directly or through affiliated
broker-dealers (collectively, with the insurance companies the "Participating
Insurance Companies"), by means of distribution of Variable Products and to use
their best efforts to solicit applications for Variable Products. Each
Participation Agreement shall be entered into jointly with the Plan or the
Participating Insurance Company and the Eligible Separate Account, as
appropriate. Such Participating Insurance Companies and their agents or
representatives soliciting applications for Variable Products shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of
Variable Products under any applicable insurance laws and any applicable
securities of one or more states or other jurisdictions in which Variable
Products may be lawfully sold. Each such Participating Insurance Company shall
be both registered as a broker-dealer under the Securities Exchange Act and a
member of the NASD. Each Plan and Participating Insurance Company shall agree to
comply with all laws and regulations, whether federal or state, and whether
relating to insurance, securities or other general areas, including but not
limited to the record-keeping and sales supervision requirements of such laws
and regulations.
4. DELIVERY OF DOCUMENTS. The Trust and/or each Fund has furnished the
Distributor with copies of:
(a) Agreement and Declaration of Trust and all amendments
thereto for the Trust (as amended from time to time, the
"Declaration of Trust");
(b) Bylaws and all amendments thereto for the Trust (as
amended from time to time, the "Bylaws"); and
(c) The Trust's registration statement, prospectus and
statement of additional information, then in effect (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "1933 Act") and the 1940 Act.
From time to time, the Trust will furnish the Distributor with current
copies of all amendments or supplements to the foregoing, if any, and all
documents, notices and reports filed with the Securities and Exchange Commission
(the "SEC") and will make available, upon request, evidence of payment of
registration fees imposed from time to time by the States in which securities of
each Fund are sold by the Distributor.
5. DUTIES OF THE DISTRIBUTOR. The Distributor shall provide each Fund
with the benefit of its best judgment, efforts and facilities in rendering its
services as the Distributor. The Distributor will act as the exclusive
Distributor of the Trust's Shares, subject to the supervision of the Trust's
Board of Trustees and the following understandings: (i) the Trust's Board of
Trustees shall be responsible for and control the conduct of each Fund's
affairs; (ii) in all matters relating to the performance of this Agreement, the
Distributor will act in conformity with the Declaration of Trust and Bylaws of
the Trust and the Registration Statement of each Fund and with the instructions
and directions of the Trust's Board of Trustees; and (iii) the
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Distributor will conform to and comply with applicable requirements of the 1940
Act, the 1933 Act and all other applicable federal or state laws and
regulations. In carrying out its obligations hereunder, the Distributor shall:
(a) Provide to the Trust's Board of Trustees, at least
quarterly, a written report of the amounts expended in connection
with all distribution services rendered pursuant to this
Agreement, including an explanation of the purposes for which
such expenditures were made; and
(b) Take, on behalf of each Fund, all actions which appear to
be necessary to carry into effect the distribution of each Fund's
Shares as provided in paragraph 6.
6. DISTRIBUTION OF SHARES. It is mutually understood and agreed that the
Distributor does not undertake to sell all or any specific portion of the
Shares. The Trust shall not sell any of its Shares except through the
Distributor. Notwithstanding the provisions of the foregoing sentence:
(a) The Distributor may, and when requested by the Trust,
shall, suspend its efforts to effectuate sales of the Shares at
any time when in the opinion of the Distributor or of the Trust
no sales should be made because of a need to revise a
Registration Statement, or because of market or other economic
considerations or abnormal circumstances of any kind. Either
party in its sole discretion may reject orders for the purchase
of such Shares;
(b) The Trust may withdraw the offering of its Shares (i) at
any time with the consent of the Distributor or (ii) without such
consent when so required by the provisions of any statute or of
any order, rule or regulation of any governmental body having
jurisdiction;
(c) Purchases and redemptions of Shares shall be at the net
asset value of the appropriate class of the appropriate Fund,
computed as set forth in the most recent Prospectus and Statement
of Additional Informations relating to the Trust contained in its
Registration Statement on Form N-1A, File No. 33-57732, or any
amendments thereto, and any supplements thereto ("Registration
Statement"). Trust Shares may not be sold or transferred except
to an Eligible Separate Account, a Plan or a Fund with the prior
approval of the Trust's Board of Trustees.
(d) The Distributor is not authorized by the Trust to provide
any information or to make any representations other than those
contained in the appropriate Registration Statement, or contained
in shareholder reports or other material that may be prepared by
or on behalf of the Trust for the Distributor's use. This shall
not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem
appropriate.
7. COMPENSATION. Except as provided in the second paragraph of this
Section 7, the Trust shall not pay any compensation to the Distributor for
services as principal
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underwriter herein, nor shall the Trust reimburse the Distributor for any
expenses related to such services. The Distributor may, but need not, pay or
charge other Participating Insurance Companies pursuant to agreements as
described in 3.
The Trust will pay the Distributor in consideration of its services in
connection with the distribution of Class 2 shares of each Fund a fee, accrued
daily and paid monthly, at an annual rate of 0.25% of the average daily net
asset value of such Class 2 shares of such Fund (the "Distribution Fee"). The
Distributor may direct the Trust to pay any part or all of the Distribution Fee
payable to the Distributor in respect of any Class 2 shares of any Fund directly
to persons providing funds to the Distributor to cover or otherwise enable the
incurring of expenses associated with distribution services, and the Trust
agrees to accept and to comply with such direction.
8. EXPENSES. The expenses connected with distribution shall be allocable
between the Trust and the Distributor as follows:
(a) The Distributor shall furnish the services of personnel
to the extent that such services are required to carry out its
obligations under this Agreement.
(b) The Trust assumes and shall pay or cause to be paid the
following expenses incurred on its behalf:
Registration of Shares including the expense of printing and
distributing prospectuses to existing shareholders; expenses
incurred for maintaining the Trust's or Fund's existence,
taxes and expenses related to portfolio transactions; charges
and expenses of any registrar, custodian or depository for
portfolio securities and other property, and any stock
transfer, dividend or account agent or agents; all taxes,
including securities issuance and transfer taxes, and fees
payable to federal, state or other governmental agencies;
costs and expenses in connection with the registration and
maintenance of registration of the Trust and its Shares with
the SEC and various states and other jurisdictions (including
filing fees, legal fees and disbursements of counsel);
expenses of shareholders' and directors' meetings and
preparing, printing, and mailing of proxy statements and
reports to shareholders; fees and travel expenses of
directors who are not "interested persons" as that term is
defined in the 1940 Act; expenses incident to the payment of
any dividend, distribution, withdrawal or redemption, whether
in Shares or in cash; charges and expenses of any outside
service used for pricing of the Trust's Shares; fees and
expenses of legal counsel and of independent accountants;
membership dues of industry associations; postage (excluding
postage for promotional and sales literature); insurance
premiums on property of personnel (including, but not limited
to legal claims and liabilities and litigation costs and any
indemnification related thereto); and all other charges and
costs of the Trust's operation unless otherwise explicitly
provided herein.
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(c) The Distributor will bear all expenses incurred in
connection with its performance of the services described herein
and the incurring of distribution expenses under this Agreement.
For purposes of this Agreement, "distribution expenses" of the
Distributor shall mean all expenses borne by the Distributor
which represent payment for activities primarily intended to
result in the sale of Trust Shares.
8. NON-EXCLUSIVITY. The services of the Distributor are not exclusive
and the Distributor shall be entitled to render distribution or other services
to others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers of the Distributor may
serve as officers or trustees of the Trust, and that officers or trustees of the
Trust may serve as officers of the Distributor to the extent permitted by law;
and that officers of the Distributor are not prohibited from engaging in any
other business activity or from rendering services to any other person, or from
serving as partners, officers or directors of any other firm or corporation,
including other investment companies and broker/dealers.
9. TERM AND APPROVAL. This Agreement shall become effective as of the
date first above written for an initial period of two years, and shall continue
in force and effect from year to year thereafter, provided that, with respect to
the Trust or the Trust Shares, such continuance is specifically approved at
least annually:
(a) By the Trust's Board of Trustees, including the
affirmative vote of a majority of the Board of Trustees of the
Trust who are not (i) parties to this Agreement, (ii) interested
persons of any such party (as defined in Section 2(a)(19) of the
1940 Act), or (iii) persons having a direct or indirect financial
interest in the operation of this Agreement or any agreement
related to this Agreement (the "Qualified Trustees") by votes
cast in person at a meeting called for the purpose of voting on
such approval, or
(b) By the vote of a majority of the outstanding voting
securities of the Fund (as defined in Section 2(a)(42) of the
1940 Act).
10. TERMINATION. This Agreement may be terminated, with respect to any
Fund or class of Shares, at any time, without the payment of any penalty, on
sixty (60) days' written notice, by vote of the Board of Trustees of the Trust,
or by a vote of a majority of the Qualified Trustees, or by a vote of a majority
of the outstanding voting securities of the Fund (as defined in Section 2(a)(42)
of the 1940 Act), or by the Distributor on sixty (60) days' written notice to
the Fund. Termination of this Agreement with respect to any class of Shares of
any Fund shall not cause this Agreement to terminate with respect to the other
class of Shares of such Fund or any Shares of any other Fund. The notice
provided for herein may be waived by either party. This Agreement shall
automatically terminate in the event of its assignment, the term "assignment"
for this purpose having the meaning set forth in Section (a)(4) of the 1940 Act.
11. REPRESENTATIONS AND WARRANTIES. The Trust represents and warrants to
the Distributor that any registration statement, prospectus and statement of
additional information, when such Registration Statement becomes effective, will
include all statements required to be contained therein in conformity with the
1933 Act, the 1940 Act and the rules and
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regulations of the SEC; that all statements of fact contained in any
registration statement, prospectus or statement of additional information will
be true and correct when such Registration Statement becomes effective; and that
neither any registration statement nor any prospectus or statement of additional
information when such Registration Statement becomes effective will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading to
a purchaser of Shares. The Distributor may, but shall not be obligated to,
propose from time to time such amendment or amendments to any registration
statement and such supplement or supplements to any prospectus or statement of
additional information as, in the light of future developments, may, in the
opinion of the Distributor's counsel, be necessary or advisable. If the Trust
shall not propose such amendment or amendments and/or supplement or supplements
within fifteen (15) days after receipt by the Trust of a written request from
the Distributor to do so, the Distributor may, at its option, terminate this
Agreement. The Trust shall not file any amendment to any registration statement
or supplement to any prospectus or statement of additional information without
giving the Distributor reasonable notice thereof in advance; provided, however,
that nothing contained in this Agreement shall in any way limit the Trust's
right to file at any time such amendments to any registration statement and/or
supplements to any prospectus or statement of additional information, of
whatever character, as the Trust may deem advisable, such right being in all
respects absolute and unconditional.
12. AMENDMENTS. This Agreement may be amended, with respect to any Fund
or class of Shares, by the parties hereto only if such amendment is specifically
approved (i) by the Board of Trustees of the Trust or by the vote of majority of
outstanding voting securities of the Fund, and (ii) by a majority of the
Qualified Trustees, which vote must be cast in person at a meeting called for
the purpose of voting on such approval.
13. INDEMNIFICATION.
(a) The Trust authorizes the Distributor and any dealers with
whom the Distributor has entered into dealer agreements to use
any prospectus or statement of additional information furnished
by the Trust from time to time, in connection with the sale of
Shares of each Fund. The Trust agrees to indemnify, defend and
hold the Distributor, its several officers and directors, and any
person who controls the Distributor within the meaning of Section
15 of the 1933 Act, free and harmless from and against any and
all claims, demands, liabilities and expenses (including the cost
of investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which
Distributor, its officers and directors, or any such controlling
person, may incur under the 1933 Act, the 1940 Act or common law
or otherwise, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in any
registration statement, any prospectus or any statement of
additional information, or arising out of or based upon any
omission or alleged omission to state a material fact required to
be stated in any registration statement, any prospectus or any
statement of additional information, or necessary to make the
statements in any of them not misleading; provided, however, that
the Trust's agreement to indemnify the Distributor, its officers
or directors, and any such controlling person shall not be deemed
to cover any claims, demands, liabilities or expenses arising out
of or based upon any statements or representations made by the
Distributor or its
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representatives or agents other than such statements and
representations as are contained in any registration statement,
prospectus or statement of additional information and in such
financial and other statements as are furnished to the
Distributor pursuant to paragraph 2 hereof; and further provided
that the Trust's agreement to indemnify the Distributor and the
Trust's representations and warranties shall not be deemed to
cover any liability to the Trust or its shareholders to which the
Distributor would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
its duties, or by reason of the Distributor's reckless disregard
of its obligations and duties under this Agreement. The Trust's
agreement to indemnify the Distributor, its officers and
directors, and any such controlling person, as aforesaid, is
expressly conditioned upon the Trust's being notified of any
action brought against the Distributor, its officers or
directors, or any such controlling person, such notification to
be given by letter or by telegram addressed to the Trust at its
principal office stated herein and sent to the Trust by the
person against whom such action is brought, within ten (10) days
after the summons or other first legal process shall have been
served. The failure so to notify the Trust of any such action
shall not relieve the Trust from any liability that the Trust may
have to the person against whom such action is brought by reason
of any such untrue or alleged untrue statement or omission or
alleged omission otherwise than on account of the Trust's
indemnity agreement contained in this paragraph 13(a). The
Trust's indemnification agreement contained in this paragraph
13(a) and the Trust's representations and warranties in this
Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the
Distributor, its officers and directors, or any controlling
person, and shall survive the delivery of any Shares. This
agreement of indemnity will inure exclusively to the
Distributor's benefit, to the benefit of its several officers and
directors and their respective estates, and to the benefit of the
controlling persons and their successors. The Trust agrees to
notify the Distributor promptly of the commencement of any
litigation or proceedings against the Trust or any of its
officers or trustees in connection with the issuance and sale of
any Shares.
(b) The Distributor agrees to indemnify, defend and hold the
Trust, its several officers and trustees, and any person who
controls the Trust within the meaning of Section 15 of the 1933
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith) that the
Trust, its officers or trustees or any such controlling person
may incur under the 1933 Act, the 1940 Act or common law or
otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or trustees or such
controlling person resulting from such claims or demands shall
arise out of or be based upon (a) any unauthorized sales
literature, advertisements, information, statements or
representations or (b) any untrue or allegedly untrue statement
of a material fact contained in information furnished in writing
by the Distributor to the Trust and used in the answers to any of
the items of the Registration Statement or in the corresponding
statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission
or alleged omission to state a material fact in connection with
such information furnished in writing by the Distributor to the
Trust and required to be stated in such answers or necessary to
make such information not misleading. The Distributor's
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agreement to indemnify the Trust, its officers and trustees, and
any such controlling person, as aforesaid, is expressly
conditioned upon the Distributor being notified of any action
brought against the Trust, its officers or trustees, or any such
controlling person, such notification to be given by letter or
telegram addressed to the Distributor at its principal office as
stated herein and sent to the Distributor by the person against
whom such action is brought, within ten days after the summons or
other first legal process shall have been served. The failure so
to notify the Distributor of any such action shall not relieve
the Distributor from any liability that the Distributor may have
to the Trust, its officers or trustees, or to such controlling
person by reason of any such untrue or alleged untrue statement
or omission or alleged omission otherwise than on account of the
Distributor's indemnity agreement contained in this paragraph
13(b). The Distributor agrees to notify the Trust promptly of the
commencement of any litigation or proceedings against the
Distributor or any of its officers or directors in connection
with the issuance and sale of any Shares.
(c) In case any action shall be brought against any
indemnified party under paragraphs 13(a) or 13(b) hereof, and it
shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish to do so, to assume the defense
thereof with counsel satisfactory to such indemnified party. If
the indemnifying party opts to assume the defense of such action,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof
other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees
and expenses of separate counsel to such indemnified party if (i)
the indemnifying party and the indemnified party shall have
agreed to the retention of such counsel or (ii) the indemnified
party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel
would be inappropriate due to actual or potential differing
interests between them in the conduct of the defense of such
action.
14. LIABILITY OF THE DISTRIBUTOR. In the performance of its duties
hereunder, the Distributor shall be obligated to exercise care and diligence and
to act in good faith and to use its best efforts within reasonable limits to
insure the accuracy of all services performed under this Agreement, but the
Distributor shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of the
Distributor or reckless disregard by the Distributor of its duties under this
Agreement.
15. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other party at such
address as such other party may designate for the receipt of such notice. Until
further notice to the other party, it is agreed that the address of the Trust
shall be 0000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000, and the address of the
Distributor shall be 00000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000.
16. DECLARATION OF TRUST AND LIMITATION OF LIABILITY. A copy of the
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
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each Fund, and that the obligations of this Agreement with respect to each 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 Fund or series of the
Trust or upon any of the trustees, officers, employees, agents or shareholders
of the Fund or the Trust individually.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
WM VARIABLE TRUST, on behalf of its series
STRATEGIC GROWTH PORTFOLIO
CONSERVATIVE GROWTH PORTFOLIO
BALANCED PORTFOLIO
CONSERVATIVE BALANCED PORTFOLIO
FLEXIBLE INCOME PORTFOLIO
SHORT TERM INCOME FUND
U.S. GOVERNMENT SECURITIES FUND
INCOME FUND
MONEY MARKET FUND
EQUITY INCOME FUND
GROWTH & INCOME FUND
GROWTH FUND OF THE NORTHWEST
GROWTH FUND
MID CAP STOCK FUND
SMALL CAP STOCK FUND
INTERNATIONAL GROWTH FUND
By:_______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
Attest:
By:______________________________
Name: Xxxxx X. Xxxxxx
Title: Treasurer
WM FUNDS DISTRIBUTOR, INC.
By:_____________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
Attest:
By:______________________________
Xxxxxx X. Xxxxxxx
Secretary
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