Exhibit 5(c)
INVESTMENT SUB-ADVISORY AGREEMENT
This Agreement is made and entered into as of this 20th day of March 1998,
by and between WM Advisors, Inc. ("WM Advisors"), a corporation organized under
the laws of the state of Washington and Janus Capital Corporation (the "Sub-
Advisor"), a corporation organized under the laws of the state of Colorado.
W I T N E S S E T H
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Whereas, WM Trust II (the "Company"), an unincorporated business trust
organized under the laws of The Commonwealth of Massachusetts, is engaged in
business as an open-end, management investment company and is so registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act");
Whereas, the Company offers a number of investment portfolios, each with
its own investment objective and strategies, and of which one investment
portfolio is the Growth Fund (the "Fund");
Whereas, WM Advisors is engaged in the business of rendering investment
advisory and management services, is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is the
investment advisor of the Fund;
Whereas, the Sub-Advisor is engaged in the business of rendering investment
advisory and management services and is registered as an investment adviser
under the Advisers Act; and
Whereas, WM Advisors desires to retain the Sub-Advisor to furnish
investment advisory and management services to the Fund and the Sub-Advisor is
willing to furnish such services;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
it is hereby agreed by and between the parties hereto as follows:
1. Investment Description; Appointment
The Company desires to employ the capital of the Fund by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Master Trust Agreement, as amended, and in its Prospectus and
Statement of Additional Information relating to the Fund as in effect and which
may be amended from time to time, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Company. Copies
of the Fund's Prospectus and Statement of Additional Information, as amended,
have been or will be submitted to the Sub-Advisor. WM Advisors agrees to
provide copies of all amendments or
supplements to the Fund's Prospectus and Statement of Additional Information and
the Company's Master Trust Agreement to the Sub-Advisor during the continuance
of this Agreement before or at the time such amendments or supplements become
effective.
WM Advisors agrees to furnish the Sub-Advisor with minutes of meetings of
the Board of Trustees of the Company to the extent they may affect the duties of
the Sub-Advisor, a certified copy of any financial statements or reports
prepared for the Fund by certified or independent public accountants, and with
copies of any financial statements or reports made by the Fund to its
shareholders or to any governmental body or securities exchange, and any further
materials or information which the Sub-Advisor may reasonably request to enable
it to perform its functions under this Agreement. WM Advisors desires to employ
and hereby appoints the Sub-Advisor to act as investment sub-adviser to the
Fund. The Sub-Advisor accepts the appointment and agrees to furnish the
services described herein for the compensation set forth below.
2. Services as Investment Sub-Advisor
Subject to the supervision of the Board of Trustees of the Company and of
WM Advisors, the Fund's investment adviser, the Sub-Advisor will (i) maintain
compliance procedures for the Fund that the Sub-Advisor believes are adequate to
ensure its compliance with the applicable provisions of the Investment Company
Act and the Advisers Act as the same may from time to time be amended; (ii) make
investment decisions for the Fund in accordance with the Fund's investment
objective(s) and policies as stated in the Fund's Prospectus and Statement of
Additional Information as in effect and, after notice to the Sub-Advisor, and
which may be amended from time to time; (iii) place purchase and sale orders on
behalf of the Fund to effectuate the investment decisions made; (iv) maintain
books and records with respect to the securities transactions of the Fund in
accordance with the Investment Company Act and the Advisers Act and the rules
adopted thereunder and will xxxxxxx XX Advisors quarterly, annual and special
reports as WM Advisors may reasonably request; and (v) treat confidentially and
as proprietary information of the Company, all records and other information
relative to the Company and prior, present or potential shareholders; and will
not knowingly use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Company or WM Advisors, which
approval shall not be unreasonably withheld and such records may not be withheld
where the Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company or WM Advisors. In
providing those services, the Sub-Advisor will supervise the Fund's investments
and conduct a continual program of investment, evaluation and, if appropriate,
sale and reinvestment of the Fund's assets.
Subject to the supervision of WM Advisors and in accordance with the
investment objective and policies as stated in the Fund's Prospectus and
Statement of Additional Information, the Sub-Advisor is authorized, in its
discretion and without prior consultation with WM Advisors, to buy, sell, lend
and otherwise trade in any stocks, bonds, and other securities and investment
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instruments on behalf of the Fund, without regard to the length of time the
securities have been held and the resulting rate of portfolio turnover or any
tax considerations, and so long as consistent with the foregoing, the majority
or the whole of the Fund may be invested in such proportions of stocks, bonds,
other securities or investment instruments, or cash as the Sub-Advisor shall
determine. In addition, each Sub-Advisor will furnish the Fund or WM Advisors
with whatever statistical information the Company or WM Advisors may reasonably
request with respect to the instruments that the Fund may hold or contemplate
purchasing.
3. Brokerage
Subject to (i) the over-riding objective of obtaining the best possible
execution of orders; and (ii) review and approval of the Board of Trustees of
the Company, which may be conducted as often as quarterly, the Sub-Advisor shall
place all orders for the purchase and sale of securities for the Fund with
brokers or dealers selected by the Sub-Advisor, which may include brokers or
dealers affiliated with the Sub-Advisor. All transactions with any affiliated
person of the Company, or where any such affiliated person acts as broker or
agent in connection with any such transaction, shall be accomplished in
compliance with the Investment Company Act, the Advisers Act, the Securities
Exchange Act of 1934, as amended, the rules adopted thereunder and the
procedures adopted thereunder by the Company. Purchase or sell orders for the
Fund may be aggregated with contemporaneous purchase or sell orders of other
clients of the Sub-Advisor; provided that (i) no advisory account will be
favored by the Sub-Advisor over any other account; (ii) each client of the Sub-
Advisor who participates in such an aggregated order will participate at the
average share price, with all transaction costs shared on a pro rata basis;
(iii) only advisory clients' transactions will be aggregated for such an
aggregated order; and (iv) the accounts of clients whose orders are aggregated
will be segregated on the Sub-Advisor's books and records so as to identify the
particular client who has the beneficial interest therein. The Sub-Advisor
shall use its best efforts to obtain execution of Fund transactions at prices
which are advantageous to the Fund and at commission rates that are reasonable
in relation to the benefits received. However, the Sub-Advisor may select
brokers or dealers on the basis that they provide brokerage, research, or other
services or products to the Fund and/or other accounts serviced by the Sub-
Advisor. The Sub-Advisor may pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission or
dealer spread another broker or dealer would have charged for effecting that
transaction if the Sub-Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
products and/or services provided by such broker or dealer. This determination,
with respect to brokerage and research services or products, may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor and its affiliates have with respect to the Fund and to
accounts over which they exercise investment discretion, and not all such
services or products may be used by the Sub-Advisor in managing the Fund;
provided that with respect to such transaction and such determination the
affiliates of the Sub-Advisor shall have the same responsibilities to the Fund
as the Sub-Advisor has under this Agreement.
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4. Information Provided to the Company
The Sub-Advisor will keep the Company and WM Advisors informed of
developments materially affecting the Fund of which the Sub-Advisor becomes
aware and will, on its own initiative, furnish the Company and WM Advisors on at
least a quarterly basis with whatever information the Sub-Advisor believes is
appropriate for this purpose.
5. Standard of Care
The Sub-Advisor shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. Except as may otherwise be provided by
federal securities laws, the Sub-Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund 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 (the conduct excepted in this sentence shall be
referred to as "Disqualifying Conduct").
6. Compensation
In consideration of the services rendered pursuant to this Agreement, WM
Advisors will pay the Sub-Advisor on the first business day of each month a fee
for the previous month at the annual rate of .55% of the Fund's average daily
net assets including cash and cash equivalents up to $100 million and .50% of
the Fund's average daily net assets in excess of $100 million. The fee for the
first month shall be prorated based upon the number of days the account was open
in that month. Upon any termination of this Agreement before the end of a month,
the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Sub-Advisor, the value of the Fund's net assets
shall be computed at the times and in the manner specified in the Fund's
Prospectus or Statement of Additional Information relating to the Fund as from
time to time in effect.
7. Expenses
The Sub-Advisor will bear all of its expenses in performing its services
under this Agreement, which expenses shall not include brokerage fees or
commissions in connection with the effectuation of securities transactions. The
Sub-Advisor shall bear no expenses of the Company, the Fund or WM Advisors. The
Company will bear certain other expenses to be incurred in its operation,
including but not limited to: organizational expenses, taxes, interest,
brokerage fees and commissions, if any; each of trustees of the Company who are
not officers, directors or employees of the Sub-Advisor, WM Advisors, the Fund's
sub-administrator or any of their affiliates; Securities and Exchange Commission
fees and state Blue Sky qualification fees; all fees, including
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out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and the Company's sub-administrator and transaction charges of custodians;
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Company's existence; costs attributable to investor services, including
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Fund and of the officers or
Board of Trustees of the Company; and any extraordinary expenses. In addition,
the Fund pays a distribution fee pursuant to the terms of a Distribution Plan
adopted under Rule 12b-1 of the Investment Company Act. Any reimbursement of
advisory fees required by any expense limitation provision shall be the sole
responsibility of WM Advisors.
8. Services to Other Companies or Accounts
WM Advisors understands that the Sub-Advisor now acts, will continue to act
and may act in the future as investment adviser to fiduciary and other managed
accounts and as investment adviser to one or more other investment companies or
series of investment companies, and WM Advisors has no objection to the Sub-
Advisor so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in a manner reasonably equitable to each entity. Similarly, opportunities to
sell securities will be allocated in such an equitable manner. WM Advisors
recognizes that in some cases this procedure may limit the size of the position
that may be acquired or disposed of for the Fund. In addition, WM Advisors
understands that the persons employed by the Sub-Advisor to assist in the
performance of the Sub-Advisor's duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed to limit or
restrict the right of the Sub-Advisor or any affiliate of the Sub-Advisor to
engage in and devote time and attention to other business or to render services
of whatever kind or nature. WM Advisors recognizes and agrees that the Sub-
Advisor may provide advice to other clients which may differ from or be
identical to advice given with respect to the Fund.
9. Term of Agreement
This Agreement shall become effective as of the date first written above,
shall continue for a one-year term and shall continue thereafter, with respect
to the Fund, so long as such continuance is specifically approved at least
annually by (i) the Board of Trustees of the Company or (ii) a vote of a
"majority" (as defined in the Investment Company Act) of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Board of Trustees who are not "interested persons"
(as defined in the Investment Company Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, with respect to the Fund, without
penalty, on 30 days' written notice by WM Advisors, the Board of Trustees of the
Company or by vote of holders of a
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majority of the Fund's shares or, upon 60 days' written notice, by the Sub-
Advisor and will terminate automatically upon any termination of the advisory
agreement between the Company and WM Advisors. In addition, this Agreement will
also terminate automatically in the event of its assignment (as defined in the
Investment Company Act). The Sub-Advisor agrees to notify WM Advisors and the
Company of any circumstances that to its best knowledge and belief might result
in this Agreement being deemed to be assigned.
10. Representations of the Company and the Sub-Advisor
WM Advisors represents that (i) a copy of the Company's Master Trust
Agreement, dated February 22, 1989, together with all amendments thereto, is on
file in the office of the Secretary of The Commonwealth of Massachusetts, (ii)
the appointment of the Sub-Advisor has been duly authorized, (iii) it has acted
and will continue to act in conformity with the Investment Company Act and other
applicable laws, and (iv) it is authorized to perform the services herein.
The Sub-Advisor represents that it is authorized to perform the services
described herein.
11. Indemnification
WM Advisors shall indemnify and hold harmless the Sub-Advisor from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising from or in
connection with this Agreement or the performance by the Sub-Advisor of its
duties hereunder; provided, however, that nothing contained herein shall require
that the Sub-Advisor be indemnified for Disqualifying Conduct.
12. Amendment of this Agreement
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
13. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
14. Governing Law
This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.
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15. Miscellaneous
(a) Unless WM Advisors or the Company gives the Sub-Advisor written
instructions to the contrary, the Sub-Advisor shall vote all proxies solicited
by or with respect to the issuers of securities in which assets of the Fund may
be invested. The Sub-Advisor shall use its best good faith judgment to vote
such proxies in a manner which best serves the interests of the Fund's
shareholders.
(b) WM Advisors shall provide the Sub-Advisor with a copy of the Fund's
agreement (the "Custody Agreement") with the Custodian (the "Custodian")
designated to hold the assets of the Fund and any modification thereto in
advance. The Fund's assets shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement. The Sub-Advisor shall have no liability for the acts or omissions of
the Custodian. Any assets added to the Fund shall be delivered directly to the
Custodian.
(c) WM Advisors agrees and acknowledges that the Sub-Advisor is the sole
owner of the name and xxxx "Xxxxx" and that all use of any designation comprised
in whole or part of Janus (a "Xxxxx Xxxx") under this Agreement shall inure to
the benefit of the Sub-Advisor. The use by the Company on its own behalf or on
behalf of the Fund of any Xxxxx Xxxx in any advertisement or sales literature or
other materials promoting the Fund shall be with the consent of the Sub-Advisor.
The Company and WM Advisors shall not, without the consent of the Sub-Advisor,
make representations regarding the Sub-Advisor intended to be disseminated to
the investing public in any disclosure document, advertisement or sales
literature or other materials promoting the Fund. Such consent shall not be
required for any documents or other materials intended for broker-dealer use
only, for use by the Company's trustees and for internal use by the Company and
WM Advisors. Consent by the Sub-Advisor to such use of any Xxxxx Xxxx and any
such representation shall not be unreasonably withheld and shall be deemed to be
given if no written objection is received by the Company, the Fund or WM
Advisors within 3 business days after the request is made by the Company, the
Fund or WM Advisors for such use of any Xxxxx Xxxx or any such representation.
Upon termination of this Agreement for any reason, the Company and WM Advisors
shall cease all use of any Xxxxx Xxxx(s) as soon as reasonably practicable.
(d) The Sub-Advisor agrees and acknowledges that the Company is the sole
owner of the name and xxxx "WM Trust II" and WM Advisors is the sole owner of
the name and xxxx "WM Advisors, Inc.." and that any and all use of any
designation comprised in whole or in part of "WM Trust II" or "WM Advisors,
Inc." (each a "WM Xxxx") under this Agreement shall inure to the benefit of the
Company or WM Advisors, respectively. The use by the Sub-Advisor on its own
behalf of any WM Xxxx in any advertisement or sales literature or other
materials promoting the Sub-Advisor shall be with the consent of the Company or
WM Advisors, respectively. The Sub-Advisor shall not, without the consent of
the Company or WM Advisors, as applicable, make representations regarding the
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Company, the Fund or WM Advisors in any disclosure document, advertisement or
sales literature or other materials promoting the Sub-Advisor. Consent by the
Company and WM Advisors to such use of any WM Xxxx and any such representations
shall not be unreasonably withheld and shall be deemed to be given if no written
objection is received by the Sub-Advisor within 5 business days after the
request by the Sub-Advisor is made for such use of any WM Xxxx or any such
representations. Upon termination of this Agreement for any reason, the Sub-
Advisor shall cease any and all use of any WM Xxxx as soon as reasonably
practicable.
(e) The Sub-Advisor may perform its services through any employee, officer
or agent of the Sub-Advisor, and the Company and the Fund shall not be entitled
to the advice, recommendation, or judgment of any specific person.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
ATTEST: WM ADVISORS, INC.
/s/ Xxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxx X. Xxxx Name: Xxxxxxx X. Xxxxxx
Title: Secretary Title: President
ATTEST: JANUS CAPITAL CORPORATION
Xxxxx Xxxxxx By: Xxxxxx Xxxx
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Name: Xxxxx Xxxxxx Name: Xxxxxx Xxxx
Title: Secretary Title: Vice President
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