INVESTMENT SUB-ADVISORY AGREEMENT
THE GROWTH FUND OF WM ADVISORS, INC.
EFFECTIVE AS OF MARCH 1ST, 2005
This Agreement is made and entered into as of this 1st day of March,
2005, among WM Advisors, Inc. ("WM Advisors"), a corporation organized under the
laws of the state of ▇▇▇▇▇▇▇▇▇▇, ▇▇ Trust II, a business trust formed under the
laws of the Commonwealth of Massachusetts (the "Trust"), on behalf of its Growth
Fund series (the "Fund"), and Salomon Brothers Asset Management Inc, (the
"Sub-Advisor"), a corporation organized under the laws of the state of Delaware.
Whereas, the Trust 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 "1940 Act");
Whereas, the Trust offers a number of investment portfolios, each with
its own investment objective and strategies, and of which one investment
portfolio is 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
WM Advisors desires to employ such portion of the capital of the Fund
as may from time to time be determined by WM Advisors by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in the Trust's Master Trust Agreement, as amended, and in the
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
Trust. Copies of the Fund's Prospectus and Statement of Additional Information
and the Trust's Master Trust Agreement, 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 Trust'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. Until WM Advisors delivers any such amendment or
supplement to the Sub-Advisor, the Sub-
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Advisor shall be fully protected in relying on the Prospectus and Statement of
Additional information and any supplements thereto previously furnished to the
Sub-Advisor.
WM Advisors agrees to furnish the Sub-Advisor with minutes of meetings
of the Board of Trustees of the Trust 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-advisor 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 Trust and of
WM Advisors, the Fund's investment adviser, the Sub-Advisor will, with respect
to the portion of the Fund allocated to the Sub-Advisor by WM Advisors, (a)
maintain compliance procedures that the Sub-Advisor believes are adequate to
ensure its compliance with the applicable provisions of the 1940 Act, and the
Advisers Act, as the same may from time to time be amended; (b) comply with the
applicable provisions of the Trust's Master Trust Agreement; (c) make investment
decisions in accordance with the Fund's investment objectives 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; (d) place purchase and sale orders on behalf of the Fund to effectuate
the investment decisions made; (e) maintain books and records with respect to
the securities transactions of the Fund in accordance with the 1940 Act and the
Advisers Act and the rules adopted thereunder and will furnish to the Trust's
Board of Trustees or WM Advisors such quarterly, annual and special reports as
the Board or WM Advisors may reasonably request; and (f) treat confidentially
and as proprietary information of the Trust, all records and other information
relative to the Trust 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 Trust, 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 Trust. In providing those services, the
Sub-Advisor will supervise the Fund's investments and conduct a continuous
program of investment, evaluation and, if appropriate, sale and reinvestment of
the Fund's assets. The Sub-Advisor has responsibility for providing investment
services and advice only with respect to such discrete portion of the Fund as
may from time to time be allocated to the Sub-Advisor by WM Advisors. Subject to
the supervision of WM Advisors and in accordance with the investment objectives
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 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
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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, the
Sub-Advisor will furnish the Fund or WM Advisors with whatever statistical
information the Fund or WM Advisors may reasonably request with respect to the
investments that the Fund may hold or contemplate purchasing. The Sub-Advisor
will not consult with any other sub-advisors of any other funds within the Trust
(or any sub-advisors with respect to any other portion of the Fund) concerning
the transactions in securities or other assets of the Fund or any other funds of
the Trust other than for purposes of complying with the conditions of paragraphs
(a) and (b) of Rule 12d3-1 under the 1940 Act.
3. Brokerage
Subject to (i) the over-riding objective of obtaining the best possible
execution of orders; and (ii) review and approval of WM Advisors and/or the
Board of Trustees of the Trust, 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 Trust, or where any such affiliated person
acts as broker or agent in connection with any such transaction, shall be
accomplished in compliance with the 1940 Act, the Advisers Act, the Securities
Exchange Act of 1934, as amended, the rules adopted thereunder and the
procedures adopted thereunder by the Trust. 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 WM Advisors and the Trust
The Sub-Advisor will keep the Trust 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 Trust 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,
the Trust, on behalf of the Fund, will pay the Sub-Advisor on the first business
day of each month a fee for the previous month according to the schedule of fees
detailed in Annex A attached to this Agreement. 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 under management by the Sub-Advisor 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 not be required to bear any expenses of the Trust, the
Fund or WM Advisors. The Trust 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; fees of trustees of the Trust
who are not officers, directors or employees of the Sub-Advisor, WM Advisors, or
any of their affiliates; Securities and Exchange Commission fees and state Blue
Sky qualification fees; all fees, including out-of-pocket expenses of
custodians, transfer and dividend disbursing agents and transaction charges of
custodians; insurance premiums; outside auditing and legal expenses; costs of
maintenance of the Trust'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
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Board of Trustees of the Trust; 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 1940 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 accordance with procedures reasonably believed to be equitable to each
entity. Similarly, opportunities to sell securities will be allocated in 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
Except as otherwise provided below, this Agreement shall become
effective as of the date first written above, shall continue for a period of two
years thereafter, and shall continue in effect for a period of more than two
years thereafter only so long as such continuance is specifically approved at
least annually by (a) the Board of Trustees of the Trust or (b) a vote of a
"majority" (as defined in the ▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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, without penalty, on 30 days' written notice, by WM Advisors, the
Board of Trustees for the Trust or by vote of holders of a 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 Trust and WM Advisors. In addition, this Agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act). The
Sub-Advisor agrees to notify the Trust of any circumstances that, to its best
knowledge and belief, might result in this Agreement being deemed to be
assigned.
10. Representations of the Trust, WM Advisors and the Sub-Advisor
The Trust represents that (a) a copy of the Trust's Master Trust
Agreement, dated February 22, 1989, together with all amendments thereto, is on
file in the office of the Secretary
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of the Commonwealth of Massachusetts, and (b) it has acted and will continue to
act in conformity with the 1940 Act and other applicable laws.
WM Advisors represents that (a) the appointment of the Sub-Advisor has
been duly authorized; (b) it has acted and will continue to act in conformity
with the 1940 Act and other applicable laws, and (c) it is authorized to perform
the services herein.
The Sub-Advisor represents that (a) it is authorized to perform the
services described herein, and (b) it has acted and will continue to act in
conformity with the 1940 Act and other applicable laws.
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.
Sub-Advisor shall indemnify and hold harmless WM Advisors and the Fund
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 attributable to 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. Use of Names
The parties agree and acknowledge that the Sub-Advisor is the sole
owner of the name and ▇▇▇▇ "▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Asset Management Inc" and that all
use of any designation comprised in whole or part of Salomon Brothers Asset
Management Inc and use of any logos, trademarks, service marks or trade names (a
"Sub-Advisor ▇▇▇▇") under this Agreement shall inure to the benefit of the
Sub-Advisor. The use by the Trust on its own behalf or on behalf of the Fund of
any Sub-Advisor ▇▇▇▇ in any advertisement or sales literature or other materials
promoting the Fund shall be with the written consent of the Sub-Advisor. The
Trust 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 use by the Trust's trustees and
for internal use by the Trust and WM Advisors or its affiliates. WM Advisors
agrees that it will review with the Sub-Advisor any advertisement, sales
literature, or notice (collectively, "Sales Material") prepared by WM Advisors
or any affiliate prior to its use that makes reference to the Sub-Advisor or its
affiliates or any such name(s), derivatives, logos, trademarks, service marks or
trade names, it being understood that the Sub-Advisor shall have no
responsibility to ensure
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the adequacy of the form or content of such materials for purposes of the 1940
Act or other applicable laws and regulations. Notwithstanding the foregoing,
Sub-Advisor shall be responsible for ensuring the adequacy and accuracy of
information about Sub-Advisor provided to WM Advisors or its affiliates for use
in Sales Material prepared by WM Advisors or its affiliates. Consent by the
Sub-Advisor to such use of any Sub-Advisor ▇▇▇▇ and any such representation
shall not be unreasonably withheld and shall be deemed to be given if no written
objection is received by the Trust, the Fund or WM Advisors within 5 business
days after the request is made by the Trust, the Fund or WM Advisors for such
use of any Sub-Advisor ▇▇▇▇ or any such representation. Upon termination of this
Agreement for any reason, the Trust and WM Advisors shall cease all use of any
Sub-Advisor ▇▇▇▇(s) as soon as reasonably practicable. If WM Advisors or the
Fund makes an unauthorized use of the Sub-Advisor's names, derivatives, logos,
trademarks, service marks or trade names, the parties acknowledge that the
Sub-Advisor shall suffer irreparable hardship for which monetary damages are
inadequate and thus, the Sub-Advisor will be entitled to injunctive relief.
The Sub-Advisor agrees and acknowledges that (i) the Trust is the sole
owner of the corporate name, associated good will and other rights in various
jurisdictions of the name "WM Trust II" and (ii) WM Advisors is the sole owner
of the name, associated good will and other rights in various jurisdictions of
the name "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 ▇▇▇▇") under this Agreement shall inure to the benefit of the Trust or WM
Advisors, respectively. The use by the Sub-Advisor on its own behalf of any WM
▇▇▇▇ in any advertisement or sales literature or other materials promoting the
Sub-Advisor shall be with the written consent of the Trust or WM Advisors,
respectively. The Sub-Advisor shall not, without the consent of the Trust or WM
Advisors, as applicable, make representations regarding the Trust, the Fund or
WM Advisors in any disclosure document, advertisement or sales literature or
other materials promoting the Sub-Advisor. Sub-Advisor agrees it will review
with the Trust or WM Advisors, as applicable, any advertisement, sales
literature, or other material prior to its use that makes reference to the
Trust, WM Advisors, or any affiliates or any name(s), derivatives, logos,
trademarks, service marks or trade names thereof, it being understood that
neither the Trust nor WM Advisors shall have any responsibility to ensure the
adequacy of the form or content of such materials for purposes of the 1940 Act
or other applicable laws and regulations. Notwithstanding the foregoing, WM
Advisors shall be responsible for ensuring the adequacy and accuracy of
information about WM Advisors, its affiliates, the Trust or the Funds provided
to Sub-Advisor for use in Sales Material prepared by Sub-Advisor. Consent by the
Trust and WM Advisors to such use of any WM ▇▇▇▇ 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 ▇▇▇▇ or any such
representations. Upon termination of this Agreement for any reason, the Sub-
Advisor shall cease any and all use of any WM ▇▇▇▇ as soon as reasonably
practicable.
If Sub-Advisor makes an unauthorized use of the Trust's or WM Advisor's
names, derivatives, logos, trademarks, service marks or trade names, the parties
acknowledge that the Trust or WM Advisors, as applicable, shall suffer
irreparable hardship for which monetary damages are inadequate and thus, the
Trust or WM Advisors, as applicable, will be entitled to injunctive relief.
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14. Declaration of Trust and Limitation of Liability
A copy of the Master Trust Agreement 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 Fund, and that the obligations of this Agreement with respect to the 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 series of the Trust or
upon any of the Trustees, officers, employees, agents or shareholders of the
Fund or the Trust individually.
15. Entire Agreement; Amendment of Management Agreement
This Agreement constitutes the entire agreement among the parties
hereto, except that WM Advisors and the Trust are also parties to an Investment
Management Agreement relating to the Fund dated May 11, 2004 as Amended and
Restated (the "Management Agreement").
The Trust and WM Advisors hereby amend the Management Agreement, for so
long as this Agreement shall remain in effect, to provide that: (a) The Trust,
on behalf of the Fund, shall pay to WM Advisors a monthly fee equal to the
excess, if any, of (i) the fee set forth in Section 5 of the Management
Agreement (the "Management Fee") over (ii) the fee paid by the Fund under this
Agreement or any other sub-advisory agreement with respect to the Fund; (b) WM
Advisors shall not be entitled to any other fees under the Management Agreement
with respect to the Fund; (c) The Trust acknowledges and agrees that, for so
long as Sub-Advisor meets the standard of care set forth in this Agreement, WM
Advisors 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 WM
Advisors; (d) Notwithstanding this Agreement, WM Advisors remains authorized to
determine what securities or other property shall be purchased or sold by or for
the Fund; (e) In exchange for the fee paid by the Fund under the Management
Agreement and in recognition of its obligation to select and monitor the
Sub-Advisor, and not for the services provided by the Sub-Advisor pursuant to
the Sub-Advisory Agreement, WM Advisors shall 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
held liable arising out of or attributable to any actual or alleged failure of
Sub-Advisor to meet the standard of care set forth in this Agreement.
16. Governing Law
This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.
17. Miscellaneous
(a) Unless WM Advisors or the Trust 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 in accordance with the Sub-Advisor's
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policies and procedures. 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 portion of the Fund to be managed by the
Sub-Advisor shall be delivered directly to the Custodian.
(c) The Sub-Advisor may perform its services through any employee,
officer or agent of the Sub-Advisor, and the Trust 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.
WM ADVISORS, INC. WM TRUST II, on behalf of its Growth Fund
series
By By
----------------------------- ------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President Title: First Vice President
SALOMON BROTHERS ASSET MANAGEMENT INC
By Dated: March 1, 2005
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
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ANNEX A
1. For purposes of calculating the fee to be paid to the Sub-Advisor under this
Agreement: "Fund Assets" shall mean the net assets of the portion of the Fund
managed by the Sub-Advisor;
"Other Assets" shall mean the net assets of the portion of the Growth
Fund series of WM Variable Trust managed by the Sub-Advisor.
"Combined Assets" shall mean the sum of Fund Assets and Other Assets;
and
"Average Daily Net Fund Assets," "Average Daily Net Other Assets" and
"Average Daily Net Combined Assets" shall mean the average of the value
of the Fund Assets, Other Assets or Combined Assets, as the case may be,
on each business day.
2. The Sub-Advisor fee shall be paid in arrears (within 10 days of month end)
based upon the Average Daily Net Combined Assets during the preceding month. The
fee payable for the month shall be calculated by applying the annual rate, as
set forth in the fee schedule below, to the Average Daily Net Combined Assets,
and dividing by twelve. The portion of the monthly fee to be paid by the Fund
shall be prorated based upon the Average Daily Net Fund Assets as compared to
the Average Daily Net Combined Assets. For a month in which this Agreement
becomes effective or terminates, the portion of the Sub-Advisor fee due
hereunder shall be prorated on the basis of the number of days that the
Agreement is in effect during the month.
3. The following fee schedule shall be used to calculate the fee to be paid to
the Sub-Advisor under this Agreement:
First Next Over
$250 $250 $500
Million Million Million
------- ------- -------
0.400% 0.350% 0.300%
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