AMERICAN SKANDIA TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 4th day of January, 1999 by and between American
Skandia Trust, a Massachusetts business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the AST Xxxxxx Small-Cap Growth
Portfolio (the "Portfolio") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Management. The Investment Manager shall act as investment manager for the
Portfolio and shall, in such capacity, manage the investment operations of the
Portfolio, including the purchase, retention, disposition and lending of
securities, subject at all times to the policies and control of the Board of
Trustees of the Trust (the "Trustees"). The Investment Manager shall give the
Portfolio the benefit of its best judgments, efforts and facilities in rendering
its services as investment manager.
2. Duties of Investment Manager. In carrying out its obligation under paragraph
1 hereof, the Investment Manager shall:
(a) supervise and manage all aspects of the Portfolio's operations:
(b) provide the Portfolio or obtain for it, and thereafter supervise,
such executive, administrative, clerical and shareholder servicing services as
are deemed advisable by the Trustees;
(c) arrange, but not pay for, the periodic updating of prospectuses and
supplements thereto, proxy material, tax returns, reports to the Portfolio's
shareholders, reports to and filings with the Securities and Exchange
Commission, state Blue Sky authorities and other applicable regulatory
authorities;
(d) provide to the Trustees on a regular basis, written financial
reports and analyses on the Portfolio's securities transactions and the
operations of comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report in writing thereon
to the Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the
Trust necessary to carry into effect such purchase and sale programs and
supervisory functions as aforesaid, including the placing of orders for the
purchase and sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Manager is responsible for
decisions to buy and sell securities for the Portfolio, broker-dealer selection,
and negotiation of the Portfolio's brokerage commission rates. The Investment
Manager shall determine the securities to be purchased or sold by the Portfolio
pursuant to its determinations with or through such persons, brokers or dealers,
in conformity with the policy with respect to brokerage as set forth in the
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider the
sale of shares of the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best price available; the
reliability, integrity and financial condition of the broker-dealer; the size of
and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Portfolio
on a continuing basis. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the Investment
Manager) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers an amount of commission
for effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the Trustees. Any investment program undertaken by the Investment
Manager pursuant to this Agreement, as well as any other activities undertaken
by the Investment Manager on behalf of the Trust pursuant hereto, shall at all
times be subject to any directives of the Trustees.
5. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Investment Manager shall at all times conform to:
(a) all applicable provisions of the ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable between
the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) of paragraph 2 hereof to place
orders for the purchase and sale of portfolio securities for the Portfolio.
(c) Nothing in subparagraph (a) hereof shall be construed to require the
Investment Manager to bear:
(i) any of the costs (including applicable office space,
facilities and equipment) of the services of a principal
financial officer of the Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, including the reviewing of calculations of net
asset value and preparing tax returns; or
(ii) any of the costs (including applicable office space,
facilities and equipment) of the services of any of the
personnel operating under the direction of such principal
financial officer.
Notwithstanding the obligation of the Trust to bear the expense of the
functions referred to in clauses (i) and (ii) of this subparagraph (c), the
Investment Manager may pay the salaries, including any applicable employment or
payroll taxes and other salary costs, of the principal financial officer and
other personnel carrying out such functions, and the Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of the
Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
expense that the Investment Manager is not required to pay or assume under this
Agreement shall not relieve the Investment Manager of any of its obligations to
the Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager may
engage, subject to approval of the Trustees and where required, the shareholders
of the Portfolio, a sub-adviser to provide advisory services in relation to the
Portfolio. Under such sub-advisory agreement, the Investment Manager may
delegate to the sub-adviser the duties outlined in subparagraphs (e), (f) and
(g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full compensation
for services rendered hereunder an annual investment advisory fee. The fee shall
be payable monthly in arrears, based on the average daily net assets of the
Portfolio for each month, at the annual rate set forth in Exhibit A to this
Agreement.
10. Non-Exclusivity. The services of the Investment Manager to the Portfolio are
not to be deemed to be exclusive, and the Investment Manager shall be free to
render investment advisory and corporate administrative or other services to
others (including other investment companies) and to engage in other activities.
It is understood and agreed that officers or directors of the Investment Manager
may serve as officers or trustees of the Trust, and that officers or trustees of
the Trust may serve as officers or directors of the Investment Manager to the
extent permitted by law; and that the officers and directors of the Investment
Manager are not prohibited from engaging in any other business activity or from
rendering services to any other person, or from serving as partners, officers or
directors of any other firm or corporation, including other investment
companies.
11. Term and Approval. This Agreement shall become effective on January 4, 1999
and by shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's
outstanding voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) the affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to this Agreement
(other than as Trust trustees), by votes cast in person at a meeting
specifically called for such purpose.
12. Termination. This Agreement may be terminated at any time without the
payment of any penalty or prejudice to the completion of any transactions
already initiated on behalf of the Portfolio, by vote of the Trustees or by vote
of a majority of the Portfolio's outstanding voting securities, or by the
Investment Manager, on sixty (60) days' written notice to the other party. The
notice provided for herein may be waived by either party. This Agreement
automatically terminates in the event of its "assignment," as such term is
defined in the ICA.
13. Liability of Investment Manager and Indemnification. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Investment Manager or any of
its officers, directors or employees, it shall not be subject to liability to
the Trust or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Trustees as trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
the Trust. Federal and state laws impose responsibilities under certain
circumstances on persons who act in good faith, and therefore, nothing herein
shall in any way constitute a waiver of limitation of any rights which the Trust
or the Investment Manager may have under applicable law.
15. Notices. Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice,
it is agreed that the address of the Trust and the Investment Manager shall be
Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000.
16. Questions of Interpretation. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the ICA, shall be resolved by reference to such term or
provision of the ICA and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission issued
pursuant to the ICA. In addition, where the effect of a requirement of the ICA,
reflected in any provision of this Agreement, is released by rules, regulation
or order of the Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
above written.
AMERICAN SKANDIA TRUST
Attest: By: ____________________________________
Xxxxxx X. Xxxxxxx
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Xxxx Xxxxx
____________________________________ Senior Vice President & Chief
Operating Officer
American Skandia Trust
AST Xxxxxx Small-Cap Growth Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of .95% of the portion of the average daily net assets of
the Portfolio not in excess of $1 billion; plus .90% of the portion of the net
assets over $1 billion.
