(d)(3)
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC
AMENDED AND RESTATED
INVESTMENT MANAGEMENT AGREEMENT
AMENDED AND RESTATED INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"),
dated as of November 1, 2005, amending and restating in its entirety the
Investment Management Agreement dated September 1, 2000, as amended as of May
14, 2002 and May 11, 2004, between the WM Strategic Asset Management Portfolios,
LLC, a Massachusetts limited liability company (the "LLC"), on behalf of each of
its investment portfolios, which are listed on the signature page of this
Agreement (each referred to herein as a "Portfolio" and, collectively, as the
"Portfolios") and WM Advisors, Inc., a Washington corporation (the "Manager").
WITNESSETH
WHEREAS, the LLC is an open-end management investment company, registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the LLC desires to retain the Manager to render investment
management services to each Portfolio, and the Manager is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Appointment. The LLC hereby appoints the Manager to act as investment
manager to each Portfolio for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
2. Management. Subject to the supervision of the Board of Trustees of the LLC,
the Manager shall manage the investment operations of each Portfolio and
the composition of each Portfolio's portfolio, including the purchase,
retention and disposition of securities therefore, in accordance with such
Portfolio's investment objectives, policies and restrictions as stated in
the Prospectus and Statement of Additional Information (as such terms are
hereinafter defined) and resolutions of the LLC's Board of Trustees and
subject to the following understandings:
A. The Manager shall provide supervision of each Portfolio's investments,
furnish a continuous investment program for each Portfolio's portfolio
and determine from time to time what securities will be purchased,
retained, or sold by each Portfolio, and what portion of the assets
will be invested or held as cash.
-72-
B. The Manager, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Limited Liability
Company Agreement of the LLC and the investment policies of the
Portfolios as determined by the Board of Trustees of the LLC.
C. The Manager shall determine the securities to be purchased or sold by
each Portfolio and shall place orders for the purchase and sale of
portfolio securities pursuant to its determinations with brokers or
dealers selected by the Manager. In executing portfolio transactions
and selecting brokers or dealers, the Manager shall use its best
efforts to seek on behalf of each Portfolio the best overall terms
available. In assessing the best overall terms available for any
transaction, the Manager may consider all factors it deems relevant,
including the breadth of the market in the security, the price of the
security, the size of the transaction, the timing of the transaction,
the reputation, financial condition, experience, and execution
capability of a broker or dealer, the amount of commission, and the
value of any brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) provided by a broker or dealer. The Manager is authorized to
pay to a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for a
Portfolio which is in excess of the amount of commission another
broker or dealer would have charged for effecting the transaction if
the Manager determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that
particular transaction or in terms of the overall responsibilities of
the Manager to the Portfolio and/or other accounts over which the
Manager exercises investment discretion.
D. On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of a Portfolio as well as other fiduciary
accounts for which it has investment responsibility, the Manager, to
the extent permitted by applicable laws and regulations, may aggregate
the securities to be so sold or purchased in order to obtain the best
execution, most favorable net price or lower brokerage commissions.
E. Subject to the provisions of the Limited Liability Company Agreement
of the LLC and the 1940 Act, the Manager, at its expense, may select
and contract with one or more investment advisers (the "Sub-adviser")
for a Portfolio to perform some or all of the services for which it is
responsible pursuant to this Section 2. The Manager shall be solely
responsible for the compensation of any Sub-adviser of a Portfolio for
its services to a Portfolio. The Manager may terminate the services of
any Sub-adviser at any time in its sole discretion, and shall at such
time assume the responsibilities of such Sub-adviser unless and until
a successor Sub-adviser is selected. To the extent that more than one
Sub-adviser is selected, the Manager shall, in its sole discretion,
determine the amount of a Portfolio's assets allocated to each such
Sub-adviser.
3. Administrative. Subject to the supervision and direction of the Board of
Trustees of the LLC, the Manager is also responsible for all administrative
functions with respect to the LLC and will (a) supervise all aspects of the
operations of the LLC; (b) supply the LLC with office
-73-
facilities (which may be in the Manager's own offices), statistical and
research data, data processing services, clerical, accounting and
bookkeeping services (including, but not limited to, the calculation of (i)
the net asset values of shares of the LLC, and (ii) distribution fees),
internal auditing and legal services, internal executive and administrative
services, and stationery and office (c) prepare reports to the LLC's
shareholders and materials for the Board of Trustees of the LLC; (d)
prepare tax returns and reports to and filings with the Securities and
Exchange Commission and state Blue Sky authorities; (e) cooperate with the
LLC's transfer agent for the purpose of establishing the implementing
procedures to ensure that the LLC's transfer agency and shareholder
relations functions are efficiently carried out; and (f) provide such other
similar services as the LLC may reasonably request to the extent permitted
under application statutes, rules and regulations. The services to be
performed by the Manager hereunder may be delegated by it, in whole or in
part, to one or more sub-administrators provided that any delegation of
duties to a sub-administrator shall not relieve the Manager of its
responsibilities hereunder. Notwithstanding anything to the contrary in
this Agreement, the Manger shall not be responsible for the performance of
any duties which are required to be performed by the LLC's transfer agent.
4. Services Not Exclusive. The services rendered by the Manager hereunder to
each Portfolio are not to be deemed exclusive, and the Manager shall have
the right to render similar services to others, including, without
limitation, other investment companies.
5. Expenses. During the term of this Agreement, the Manager shall pay all
expenses incurred by it in connection with its activities under this
Agreement, including the salaries and expenses of any of the officers or
employees of the Manager who act as officers, Trustees or employees of the
LLC, but excluding the cost of securities purchased for a Portfolio and the
amount of any brokerage fees and commissions incurred in executing
portfolio transactions for a Portfolio, and shall provide the Portfolios
with suitable office space. Other expenses to be incurred in the operation
of the Portfolios (other than those borne by any third party), including
without limitation, taxes, interest, brokerage fees and commissions, fees
of Trustees who are not officers, directors, or employees of the Manager,
federal registration fees and state Blue Sky qualification fees,
bookkeeping, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of maintaining the Fund's or the
LLC's existence, costs of independent pricing services, costs attributable
to investor services (including, without limitation, telephone and
personnel expenses), costs of preparing, printing and distributing
prospectuses to existing shareholders, costs of stockholders' reports and
meetings of shareholders and Trustees, as applicable, and any extraordinary
expenses will be borne by the Portfolios.
6. Compensation. For the services provided pursuant to this Agreement, each
Portfolio shall pay to the Manager as full compensation therefor a monthly
fee computed on the average daily net assets at the annual rate for each
Portfolio as stated in Schedule A attached hereto. The LLC acknowledges
that the Manager, as agent for the Portfolios, will allocate a portion of
the fee equal to the sub-advisory fee payable to the sub-advisor, if any,
under its sub-advisory agreement to the sub-advisor for sub-advisory
services. The LLC acknowledges that the Manager, as agent for the
Portfolios, may allocate a portion of the fee to WM Shareholder Services,
Inc. for administrative services, portfolio accounting and regulatory
compliance systems. The Manager also from time to time and in such amounts
-74-
as it shall determine in its sole discretion may allocate a portion of the
fee to WM Funds Distributor, Inc. for facilitating distribution of the
Portfolios. This payment would be made from revenue which otherwise would
be considered profit to the Manager for its services. This disclosure is
being made to the LLC solely for the purpose of conforming with
requirements of the Washington Department of Revenue for exclusion of
revenue from the Washington Business and Occupation Tax.
7. Limitation of Liability. The Manager shall not be liable for any error of
judgment or mistake of law or for any loss suffered by a Portfolio in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
8. Delivery of Documents. The LLC has heretofore delivered to the Manager true
and complete copies of each of the following documents and shall promptly
deliver to it all future amendments and supplements thereto, if any:
A. Limited Liability Company Agreement (as presently in effect and as
amended from time to time);
B. Bylaws of the LLC;
C. Registration Statement under the Securities Act of 1933 and under the
1940 Act of the LLC on Form N-1A, and all amendments thereto, as filed
with the Securities and Exchange Commission (the "Registration
Statement") relating to the Portfolios and the shares of the
Portfolios;
D. Notification of Registration of the LLC under the 1940 Act on Form
N-8A;
E. Prospectuses of the Portfolios (such prospectuses as presently in
effect and/or as amended or supplemented from time to time, the
"Prospectus"); and
STATEMENTOF ADDITIONAL INFORMATION OF THE PORTFOLIOS (SUCH STATEMENT AS
PRESENTLY IN EFFECT AND/OR AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME, THE
"STATEMENT OF ADDITIONAL INFORMATION").
9. Duration and Termination. This Agreement shall become effective as of the
date first above-written for an initial period of two years and shall
continue thereafter so long as such continuance is specifically approved at
least annually (a) by the vote of the Board of Trustees, including a
majority of those members of the LLC's Board of Trustees who are not
parties to this Agreement or "interested persons" of any such party, cast
in person at a meeting called for that purpose, or (b) by vote of a
majority of the outstanding voting securities of the Portfolios.
Notwithstanding the foregoing, this Agreement (a) may be terminated at any
time, without the payment of any penalty, by either the LLC (by vote of the
LLC's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolios) or the Manager, on sixty (60) days prior
written notice to the other, and (b) shall automatically terminate in the
event of its assignment. As used in this Agreement, the
-75-
terms "majority of the outstanding voting securities", "interested persons"
and "assignment" shall have the meanings assigned to such terms in the 1940
Act.
10. 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.
11. Use of Name and Logo. The LLC agrees that it shall furnish to the Manager,
prior to any use or distribution thereof, copies of all prospectuses,
statements of additional information, proxy statements, reports to
stockholders, sales literature, advertisements, and other material prepared
for distribution to stockholders of the LLC or to the public, which in any
way refer to or describe the Manager or which include any trade names,
trademarks or logos of the Manager or of any affiliate of the Manager. The
LLC further agrees that it shall not use or distribute any such material if
the Manager reasonably objects in writing to such use or distribution
within five (5) business days after the date such material is furnished to
the Manager.
The Manager and/or its affiliates own the names "WM," "WM Group of Funds"
and any other names which may be listed from time to time on a Schedule B
to be attached hereto that they may develop for use in connection with the
LLC, which names may be used by the LLC only with the consent of the
Manager and/or its affiliates. The Manager, on behalf of itself and/or its
affiliates, consents to the use by the LLC of such names or any other names
embodying such names, but only on condition and so long as (i) this
Agreement shall remain in full force, (ii) the LLC shall fully perform,
fulfill and comply with all provisions of this Agreement expressed herein
to be performed, fulfilled or complied with by it, and (iii) the Manager is
the manager of each Portfolio of the LLC. No such name shall be used by the
LLC at any time or in any place or for any purposes or under any conditions
except as provided in this section. The foregoing authorization by the
Manager, on behalf of itself and/or its affiliates, to the LLC to use such
names as part of a business or name is not exclusive of the right of the
Manager and/or its affiliates themselves to use, or to authorize others to
use, the same; the LLC acknowledges and agrees that as between the Manager
and/or its affiliates and the LLC, the Manager and/or its affiliates have
the exclusive right so to use, or authorize others to use, such names, and
the LLC agrees to take such action as may reasonably be requested by the
Manager, on behalf of itself and/or its affiliates, to give full effect to
the provisions of this section (including, without limitation, consenting
to such use of such names). Without limiting the generality of the
foregoing, the LLC agrees that, upon (i) any violation of the provisions of
this Agreement by the LLC or (ii) any termination of this Agreement, by
either party or otherwise, the LLC will, at the request of the Manager, on
behalf of itself and/or its affiliates, made within six months after such
violation or termination, use its best efforts to change the name of the
LLC and/or the Portfolios so as to eliminate all reference, if any, to such
names and will not thereafter transact any business in a name containing
such names in any form or combination whatsoever, or designate itself as
the same entity as or successor to an entity of such names, or otherwise
use such names or any other reference to the Manager and/or its affiliates,
except as may be required by law. Such covenants on the part of the LLC
shall be binding upon it, its Trustees, officers, shareholders, creditors
and all other persons claiming under or through it.
-76-
The provisions of this section shall survive termination of this Agreement.
12. Notices. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, if to the LLC: 0000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager: 0000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000; or to either party at such other
address as such party shall designate to the other by a notice given in
accordance with the provisions of this section.
13. Miscellaneous.
A. Except as otherwise expressly provided herein or authorized by the
Board of Trustees of the LLC from time to time, the Manager for all
purposes herein shall be deemed to be an independent contractor and
shall have no authority to act for or represent the LLC or the
Portfolios in any way or otherwise be deemed an agent of the LLC or
the Portfolios.
B. The LLC shall furnish or otherwise make available to the Manager such
information relating to the business affairs of the Portfolios as the
Manager at any time or from time to time reasonably requests in order
to discharge its obligations hereunder.
C. This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts and shall inure to the
benefit of the parties hereto and their respective successors.
D. If any provision of this Agreement shall be held or made invalid or by
any court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
14. Limitation of Liability. A copy of the Certificate of Organization of the
LLC is on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed by an officer of the
LLC on behalf of the Trustees of the LLC, as trustees and not individually,
on further behalf of each Portfolio, and that the obligations of this
Agreement with respect to a Portfolio shall be binding upon the assets and
properties of that Portfolio only and shall not be binding upon the assets
and properties of any other Portfolio or series of the LLC or upon any of
the Trustees, officers, employees, agents or shareholders of the Portfolios
or the LLC individually.
[The remainder of this page has intentionally been left blank.]
-77-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first above-written.
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC,
on behalf of its portfolios
INCOME PORTFOLIO,
FLEXIBLE INCOME PORTFOLIO,
BALANCED PORTFOLIO,
CONSERVATIVE GROWTH PORTFOLIO, and
STRATEGIC GROWTH PORTFOLIO
By:
------------------------------------
Xxxxxxx X. Xxxxxx, President
Attest:
By:
---------------------------------
Xxxx X. Xxxx, Secretary
WM ADVISORS, INC.
By:
------------------------------------
Xxxxxxx X. Xxxxxx, President
Attest:
By:
---------------------------------
Xxxxxx X. Xxxxxxx, Secretary
-78-
Schedule A
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC
The management fee to be charged for advisory services (including
sub-advisory fees, if any) for each Portfolio is based upon a percentage of the
average daily net assets of such Portfolio. The total management fee to be paid
monthly for each Portfolio is as follows:
PORTFOLIO FEE
--------- ---
Conservative Balanced Portfolio Monthly fee computed on the aggregate average
Balanced Portfolio Conservative daily net assets of the all of the Portfolios
Growth Portfolio Strategic (with each Portfolio paying a proportionate
Growth Portfolio Flexible Income share based on its average daily net assets)
Portfolio at a rate equal to .550% per annum on the
first $500 million of assets; .500% on the
next $500 million of assets; .450% on the
next $1 billion of assets; .400% on the next
$1 billion of assets; .350% on the next $1
billion of assets; .300% on the next $1
billion of assets and .250% per annum on
assets in excess of $5 billion.
-79-
