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Exhibit (d)(3)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"), dated _____ __,
1999, between the WM Strategic Asset Management Portfolios, LLC, a Massachusetts
limited liability company (the "LLC"), 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
WHEREAS, the LLC is an open-end management investment company,
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the LLC 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 LLC 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
LLC, 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 LLC'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.
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B. The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the LLC
Operating Agreement of the LLC and the investment policies of
the Portfolios as determined by the Board of Trustees of the
LLC.
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 LLC Operating Agreement of
the LLC 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,
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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 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 LLC, 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 LLC'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 LLC
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 LLC 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
LLC 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.
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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.
7. Delivery of Documents. The LLC 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. LLC Operating Agreement (as presently in effect and as amended
from time to time);
B. Bylaws of the LLC;
C. Registration Statement under the Securities Act of 1933 and
under the 1940 Act of the LLC 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 LLC 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 LLC'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 (b)
by vote of a majority of the outstanding voting securities of the
Portfolios. Notwithstanding the foregoing, this Agreement (a) may be
terminated at any time, without the payment of any penalty, by either
the LLC (by vote of the LLC'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.
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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.
10. Use of Name and Logo. The LLC 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 LLC 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 LLC 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 LLC, which names may be used by the LLC 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 LLC
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 LLC 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 LLC. No such name shall be used by the LLC 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 LLC 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 LLC acknowledges and agrees that as
between the Manager and/or its affiliates and the LLC, the Manager
and/or its affiliates have the exclusive right so to use, or authorize
others to use, such names, and the LLC 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 LLC agrees that,
upon (i) any violation of the provisions of this Agreement by the LLC
or (ii) any termination of this Agreement, by either party or
otherwise, the LLC 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 LLC 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
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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 LLC 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.
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 LLC: 0000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager:
0000 Xxxxx Xxxxxx, 00xx Xxxxx, 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 LLC 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 LLC or the Portfolios in any way or otherwise
be deemed an agent of the LLC or the Portfolios.
B. The LLC 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. Limitation of Liability. A copy of the Certificate of Formation of the
LLC is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this Agreement is executed by an
officer of the LLC on behalf of the Trustees of the LLC, 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 LLC or upon any of the Trustees, officers, employees,
agents or shareholders of the Portfolios or the LLC 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, LLC,
on behalf of its portfolios
INCOME PORTFOLIO,
FLEXIBLE INCOME PORTFOLIO,
BALANCED PORTFOLIO,
CONSERVATIVE GROWTH PORTFOLIO, and
STRATEGIC GROWTH PORTFOLIO
By:
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Name: Xxxxxxx X. Xxxxxx
Title: President
Attest:
By:
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Name: Xxxx X. Xxxx
Title: Secretary
WM ADVISORS, INC.
By:
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Xxxxxxx X. Xxxxxx
President
Attest:
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Secretary
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