Exhibit (d)(1) Amended and Restated Investment Management Agreement dated
May 11, 2004
WM VARIABLE TRUST'
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"),
dated as of May 11, 2004, amending and restating in its entirety the Investment
Management Agreement dated January 30, 1998, as amended as of May 1, 2000 and
May 14, 2002 between WM Variable Trust (formerly The Sierra 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 referred to
herein as a "Fund" and collectively the "Funds") and WM Advisors Inc., a
Washington corporation (the "Manager").
WITNESSETH
WHEREAS, the Trust is an open-end series management investment company,
registered under the Investment Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Manager to render investment
management services to each Fund, 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:
Appointment. The Trust hereby appoints the Manager to act as investment manager
to each Fund 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.
Management. Subject to the supervision of the Board of Trustees of the Trust,
the Manager shall manage the investment operations of each Fund and the
composition of each Fund's portfolio, including the purchase, retention and
disposition of securities therefor, in accordance with such Fund'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:
THE MANAGER SHALL PROVIDE SUPERVISION OF EACH FUND'S INVESTMENTS, FURNISH A
CONTINUOUS INVESTMENT PROGRAM FOR EACH FUND'S PORTFOLIO AND DETERMINE FROM
TIME TO TIME WHAT SECURITIES WILL BE PURCHASED, RETAINED, OR SOLD BY EACH
FUND, AND WHAT PORTION OF THE ASSETS WILL BE INVESTED OR HELD AS CASH.
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 FUNDS AS DETERMINED
BY THE BOARD OF TRUSTEES OF THE TRUST.
THE MANAGER SHALL DETERMINE THE SECURITIES TO BE PURCHASED OR SOLD BY EACH
FUND 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 FUND 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), 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 FUND 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 FUND AND/OR OTHER ACCOUNTS OVER WHICH THE MANAGER
EXERCISES INVESTMENT DISCRETION.
ON OCCASIONS WHEN THE MANAGER DEEMS THE PURCHASE OR SALE OF A SECURITY TO
BE IN THE BEST INTEREST OF A FUND 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.
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 SUB-ADVISERS (THE "SUBADVISER") FOR
EACH FUND TO PERFORM SOME OR ALL OF THE SERVICES FOR WHICH IT IS
RESPONSIBLE PURSUANT TO THIS SECTION 2. IN PARTICULAR, FOR SO LONG AS A
SUBADVISER MEETS THE STANDARD OF CARE SET FORTH IN THE RELEVANT SUBADVISORY
AGREEMENT, WHICH SHALL HAVE BEEN APPROVED BY THE VOTE OF THE TRUST'S BOARD
OF TRUSTEES INCLUDING A MAJORITY OF THOSE MEMBERS OF THE BOARD OF TRUSTEES
WHO ARE NOT PARTIES TO
SUCH AGREEMENT OR "INTERESTED PERSONS" OF ANY SUCH PARTY, CAST IN PERSON AT
A MEETING CALLED FOR THAT PURPOSE, AND BY VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THE FUND (EACH A "SUBADVISORY AGREEMENT"),
THE MANAGER SHALL HAVE NO OBLIGATION TO (I) FURNISH A CONTINUOUS INVESTMENT
PROGRAM FOR THE FUND, (II) DETERMINE FROM TIME TO TIME WHAT SECURITIES WILL
BE PURCHASED, RETAINED OR SOLD BY THE FUND, AND WHAT PORTION OF THE FUND'S
ASSETS WILL BE HELD AS CASH, OR (III) PLACE ORDERS FOR THE PURCHASE AND
SALE OF PORTFOLIO SECURITIES FOR THE FUND WITH BROKERS OR DEALERS SELECTED
BY THE MANAGER; PROVIDED, HOWEVER, THAT THE MANAGER SHALL REMAIN AUTHORIZED
TO DETERMINE WHAT SECURITIES OR OTHER PROPERTY SHALL BE PURCHASED OR SOLD
BY THE FUNDS. THE MANAGER MAY TERMINATE THE SERVICES OF ANY SUBADVISER AT
ANY TIME IN ITS SOLE DISCRETION, AND SHALL, AT SUCH TIME, ASSUME THE
RESPONSIBILITIES OF SUCH SUBADVISER UNLESS AND UNTIL A SUCCESSOR SUBADVISER
IS SELECTED. TO THE EXTENT THAT MORE THAN ONE SUBADVISER IS SELECTED, THE
MANAGER SHALL, IN ITS SOLE DISCRETION, DETERMINE THE AMOUNT OF THE FUND'S
ASSETS ALLOCATED TO EACH SUCH SUBADVISER. THE MANAGER AGREES TO INDEMNIFY
AND HOLD THE TRUST HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, COSTS,
EXPENSES (INCLUDING ATTORNEYS' FEES), LOSSES, DAMAGES, CHARGES, PAYMENTS
AND LIABILITIES OF ANY SORT OR KIND WHICH MAY BE ASSERTED AGAINST THE TRUST
OR FOR WHICH THE TRUST MAY BE LIABLE ARISING OUT OF OR ATTRIBUTABLE TO ANY
ACTUAL OR ALLEGED FAILURE OF A SUBADVISER TO MEET THE STANDARD OF CARE SET
FORTH IN THE RELEVANT SUBADVISORY AGREEMENT.
Services Not Exclusive. The investment management services rendered by the
Manager hereunder to the Funds 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.
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 the Funds and the amount of any brokerage fees and
commissions incurred in executing portfolio transactions for the Funds, and
shall provide the Funds with suitable office space. Other expenses to be
incurred in the operation of the Funds (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 Funds' 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 of the Funds or the Trust, as applicable, and any
extraordinary expenses will be borne by the Funds.
Compensation. For the services provided pursuant to this Agreement, the Trust
shall pay to the Manager as full compensation therefor a monthly fee computed on
the average daily net assets as the annual rate for each Fund as stated in
Schedule A attached hereto minus the monthly fee payable by the Fund directly to
its Subadviser or Subadvisers pursuant to the relevant Subadvisory Agreement(s),
as applicable. The Trust acknowledges that the Manager, as agent for the Funds,
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 for the Funds. 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.
Limitation of Liability. The Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust 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.
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:
AGREEMENT AND DECLARATION OF TRUST AS PRESENTLY IN EFFECT AND AS AMENDED
FROM TIME TO TIME;
BYLAWS OF THE TRUST;
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 TRUST AND THE SHARES OF THE FUNDS;
NOTIFICATION OF REGISTRATION OF THE TRUST UNDER THE 1940 ACT ON FORM N-8A;
PROSPECTUSES OF THE TRUST RELATING TO SHARES OF THE FUNDS (SUCH
PROSPECTUSES AS PRESENTLY IN EFFECT AND/OR AS AMENDED OR SUPPLEMENTED FROM
TIME TO TIME, THE "PROSPECTUS"); AND
STATEMENT OF ADDITIONAL INFORMATION OF THE TRUST RELATING TO SHARES OF THE
FUNDS (SUCH STATEMENT AS PRESENTLY IN EFFECT AND/OR AS AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, THE "STATEMENT OF ADDITIONAL INFORMATION").
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 each Fund. Notwithstanding the foregoing, (a) this Agreement may be
terminated with respect to any Fund 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 Fund) 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.
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.
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 "Sierra", "Composite" 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
Fund and 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 Fund 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 a Fund or 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 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.
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: 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.
Miscellaneous.
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 IN ANY WAY OR OTHERWISE BE
DEEMED AN AGENT OF THE TRUST.
THE TRUST SHALL FURNISH OR OTHERWISE MAKE AVAILABLE TO THE MANAGER SUCH
INFORMATION RELATING TO THE BUSINESS AFFAIRS OF THE TRUST AS THE MANAGER AT
ANY TIME OR FROM TIME TO TIME REASONABLY REQUESTS IN ORDER TO DISCHARGE ITS
OBLIGATIONS HEREUNDER.
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.
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.
Agreement and 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 the Funds, and
that the obligations of this Agreement shall be binding upon the assets and
properties of each Fund, individually, and shall not be binding upon the assets
and property of any other Fund or series of the Trust or upon any of the
Trustees, officers, employees, agents or shareholders of the Funds or the Trust
individually.
[The remainder of this page has intentionally been left blank.]
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 VARIABLE TRUST, on behalf of its
series
SMALL CAP VALUE FUND
HIGH YIELD FUND,
REIT FUND,
EQUITY INCOME FUND,
GROWTH & INCOME FUND,
WEST COAST EQUITY FUND,
GROWTH FUND,
MID CAP STOCK FUND,
SMALL CAP GROWTH FUND,
INTERNATIONAL GROWTH FUND,
SHORT TERM INCOME FUND,
U.S. GOVERNMENT SECURITIES FUND,
INCOME FUND,
MONEY MARKET FUND,
STRATEGIC GROWTH PORTFOLIO,
CONSERVATIVE GROWTH PORTFOLIO,
CONSERVATIVE BALANCED PORTFOLIO,
BALANCED PORTFOLIO, and
FLEXIBLE INCOME PORTFOLIO
By:
------------------------------------
Xxxxxxx X. Xxxxxx
President
Attest:
By:
---------------------------------
Xxxx X. Xxxx
Secretary
WM ADVISORS, INC.
By:
------------------------------------
Xxxx Xxxxxxxxxxxx
Senior Vice President
Attest:
By:
---------------------------------
Xxxxxx X. Xxxxxxx
Secretary
SCHEDULE A
WM VARIABLE TRUST
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
EFFECTIVE JANUARY 1, 2006
FUND FEE
---- ---
Growth Fund Monthly fee computed on the average daily net
assets of the Fund equal to .75% per annum on
the first $500 million of assets; .70% on the
next $1.5 billion of assets; .65% on the next
$1 billion of assets and .60% per annum on
assets in excess of $3 billion.
Mid Cap Stock Fund Monthly fee computed on the average daily net
assets of the Fund equal to .75% per annum on
the first $1 billion of assets; .70% on the
next $1 billion of assets; .65% on the next $1
billion of assets and .60%per annum on assets
in excess of $3 billion.
Small Cap Growth Fund Monthly fee computed on the average daily net
assets of the Fund equal to .85% per annum on
the first $500 million of assets; .75% on the
next $2.5 billion of assets and .70% per annum
on assets in excess of $3 billion.
International Growth Fund Monthly fee computed on the average daily net
assets of the Fund equal to .950% per annum on
the first $50 million of assets; .850% on the
next $75 million; .750% on the next $2.875
billion and .700% per annum on assets in
excess of $3 billion.
Income Fund Monthly fee computed on the average daily net
assets of the Fund equal to .50% per annum on
the first $2 billion of assets and .45% per
annum on assets in excess of $2 billion.
Equity Income Fund Monthly fee computed on the average daily net
West Coast Equity Fund assets of the Fund equal to .625% per annum on
the first $500 million of assets and .500% per
annum on assets in excess of $500 million.
Short Term Income Fund Monthly fee computed on the average daily net
assets of the Fund equal to .500% per annum on
the first $200 million of assets; .450% on the
next $300 million of assets and .400% per
annum on assets in excess of $500 million.
U.S. Government Securities Fund Monthly fee computed on the average daily net
assets of the Fund equal to .50% per annum on
the first $2 billion of assets and .45% per
annum on assets in excess of $2 billion.
Money Market Fund Monthly fee computed on the average daily net
assets of the Fund equal to .45% per annum on
the first $1billion and .40% per annum on
assets in excess of $1 billion..
Growth & Income Fund Monthly fee computed on the average daily net
assets of the Fund equal to .75% per annum on
the first $200 million of assets; .70% per
annum on the next $200 million of assets; .65%
per annum on the next $100 million of assets;
and .575% per annum on assets in excess of
$500 million.
Advisory Fee
Flexible Income Portfolio Monthly fee computed on the average daily net
Conservative Balanced Portfolio assets of the Portfolio equal to .10% per
Balanced Portfolio annum on the first $1 billion of assets and
Conservative Growth Portfolio .075% per annum on assets in excess of
Strategic Growth Portfolio $1 billion.
Administrative Fee
Monthly fee computed on the average daily net
assets of the Portfolio equal to .15% per
annum on the first $1 billion of assets and
.125% per annum on assets in excess of $1
billion.
REIT Fund Monthly fee computed on the average daily net
assets of the Fund equal to .800% per annum on
the first $500 million of assets; .750% per
annum on the next $1.5 billion of assets;
.700% per annum on the next $1 billion of
assets; .650% per annum on assets in excess of
$3 billion.
Small Cap Value Fund Monthly fee computed on the average daily net
assets of the Fund equal to .85% per annum on
the first $500 million; .75% on the next $2.5
billion and .70% per annum on assets in excess
of $3 billion.
