Exhibit (d)(1)
WM VARIABLE TRUST
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT (this
"Agreement"), dated as of May 14, 2002, amending and restating in its entirety
the Investment Management Agreement dated January 30, 1998, as amended as of May
1, 2000, 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:
1. 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.
2. 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:
(a) 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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
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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.
3. 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.
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 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.
5. 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
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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.
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 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.
7. 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:
(a) Agreement and Declaration of Trust as presently in effect and as
amended from time to time;
(b) Bylaws of the Trust;
(c) 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;
(d) Notification of Registration of the Trust under the 1940 Act on
Form N-8A;
(e) 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
(f) 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").
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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 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.
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 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
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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.
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 Trust: 000 X. Xxxx Xxx., Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager: 0000 Xxxxx Xxxxxx, Xxxxx 0000,
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 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.
(b) 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.
(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.
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(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. 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.
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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 VARIABLE TRUST, on
behalf of its series EQUITY
INCOME FUND, GROWTH &
INCOME FUND, WEST COAST
EQUITY FUND, GROWTH FUND,
MID CAP STOCK FUND, SMALL
CAP STOCK 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: ______________________
Xxxxxxx X. Xxxxxx
President
Attest:
By: ______________________________
Xxxxxx X. Xxxxxxx
Secretary
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SCHEDULE A
WM VARIABLE TRUST
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
FUND FEE
---- ---
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;
.875% on the next $200 million of assets;
.825% on the next $250 million of assets;
.800% on the next $500 million of assets and
.775% per annum on assets in excess of $1
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 and
.70% per annum on assets in excess of $1
billion.
Small Cap Stock Fund Monthly fee computed on the average daily
net assets of the Fund equal to .90% per
annum on the first $50 million of assets;
.85% on the next $950 million of assets and
.75% per annum on assets in excess of $1
billion.
International Growth Fund Monthly fee computed on the average daily
net assets of the Fund equal to .95% per
annum on the first $50 million of assets;
.85% on the next $75 million and .75% per
annum on assets in excess of $125 million.
Income Fund Monthly fee computed on the average daily
net assets of the Fund equal to .500% per
annum on the first $1 billion of assets and
.450% per annum on assets in excess of $1
billion.
Equity Income Fund Monthly fee computed on the average daily
West Coast Equity Fund net 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.
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Short Term Income Fund Monthly fee computed on the average daily
net assets of the Fund equal to .50% per
annum on the first $200 million of assets;
.45% on the next $300 million of assets and
.40% 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 $1 billion of assets and
.45% per annum on assets in excess of $1
billion.
Money Market Fund Monthly fee equal to .45% per annum computed
on the average daily net assets of the Fund.
Growth & Income Fund Monthly fee computed on the average daily
net assets of the Fund equal to .80% per
annum on the first $100 million of assets;
.75% per annum on the next $100 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.
Conservative Balanced Portfolio Monthly fee equal to .10% per annum computed
Flexible Income Portfolio on the average daily net assets of the Fund.
Balanced Portfolio
Conservative Growth Portfolio
Strategic Growth Portfolio
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