SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services,
Incorporated (the "Advisor") and X. Xxxx Price Associates, Inc. (the
"Sub-Advisor").
WHEREAS American Skandia Trust (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an
investment company under the Investment Company Act of 1940 (the "ICA"); and
WHEREAS the trustees of the Trust (the "Trustees") have engaged the Advisor to
act as Advisor for the X. Xxxx Price Asset Allocation Portfolio (the
"Portfolio") under the terms of a management agreement, dated January 3, 1994,
with the Trust (the "Management Agreement"); and
WHEREAS the Advisor has engaged the Sub-Advisor and the Trustees have approved
the engagement of the Sub-Advisor to provide investment advice and other
investment services set forth below;
NOW, THEREFORE the Advisor and the Sub-Advisor agree as follows:
1. Investment Services The Sub-Advisor will furnish the Advisor with
investment advisory services in connection with a continuous investment
program for the Portfolio which is to be managed in accordance with the
investment objective, investment policies and actions of the Portfolio as set
forth in the Prospectus and Statement of Additional Information of the Trust
and in accordance with the Trust's Declaration of Trust and By-laws. Officers,
directors, and employees of Sub-Advisor will be available to consult with
Advisor and the Trust, their officers, employees and Trustees concerning the
business of the Trust. Advisor will promptly furnish Sub-Advisor with any
amendments to such documents. Such amendments will not be effective with
respect to the Sub-Advisor until receipt thereof.
Subject to the supervision and control of the Advisor, which is in turn
subject to the supervision and control of the Trust's Board of Trustees, the
Sub-Advisor, will in its discretion determine and select the securities to be
purchased for and sold from the Portfolio from time to time and will place
orders with and give instructions to brokers, dealers and others for all such
transactions and cause such transactions to be executed. The Portfolio will be
maintained by a custodian bank (the "Custodian") and the Advisor will
authorize the Custodian to honor orders and instructions by employees of the
Sub-Advisor authorized by the Advisor to settle transactions in respect of the
Portfolio. No assets may be withdrawn from the Portfolio other than for
settlement of transactions on behalf of the Portfolio except upon the written
authorization of appropriate officers of the Trust who shall have been
certified as such by proper authorities of the Trust prior to the withdrawal.
All transactions will be consummated by payment to or delivery by the
Custodian, or such depositories or agents as may be designated by the
Custodian, as custodian for the Trust, of all cash and/or securities due to or
from the Portfolio, and the Sub-Advisor shall not have possession or custody
thereof or any s responsibility or liability with respect thereto. The
Sub-Advisor shall advise the Custodian and confirm in writing to the Trust all
investment orders placed by it with brokers and dealer at the time and in the
manner set forth in the Trust all investment orders placed by it with brokers
and dealers at the time and in the manner set forth in the procedures mutually
agreed upon by both parties. The Trust shall issue to the Custodian such
instructions as may be appropriate in connection with the settlement of any
transaction initiated by the Sub-Advisor. The Trust shall be responsible for
all custodial arrangements and the payment of all custodial charges and fees,
and upon the giving of proper instructions to the Custodian, the Sub-Advisor
shall have no responsibility or liability with respect to custodial
arrangements or the acts, omissions or other conduct of the Custodian.
The Sub-Advisor will obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or the
Portfolio, and concerning the individual issuers whose securities are included
in the Portfolio or the activities in which they engage, or with respect to
securities which the Sub-Advisor considers desirable for inclusion in the
Portfolio.
The Sub-Advisor represents that it reviewed the Registration Statement
of the Trust, including any amendments or supplement thereto, and any Proxy
Statement relating to the approval of this Agreement as filed with the
Securities and Exchange Commission and represents and warrants that with
respect to disclosure about the Sub-Advisor or information relating directly
or indirectly to the Sub-Advisor, such Registration Statement or Proxy
Statement contains, as of the date hereof, no untrue statement of any material
fact and does not omit any statement of material fact which was required to be
stated therein or necessary to make the statements contained therein not
misleading. The Sub-Advisor further represents and warrants that it is an
investment advisor registered under the Investment Advisers Act of 1940, as
amended, and under the laws of all jurisdictions in which the conduct of its
business hereunder requires such registration.
Sub-Advisor shall use its best judgment, effort, and advice in
rendering services under this Agreement.
In furnishing the services under this Agreement, the Sub-Advisor will
comply with the requirements of the ICA applicable to it, and the regulations
promulgated thereunder.
Nothing in this Agreement shall be implied to prevent the Advisor from
engaging other Sub-advisors to provide investment advice and other services
in relation to portfolios of the Trust for which Sub-Advisor does not provide
such or to prevent Advisor from providing such services itself in relation to
such portfolios.
2. Delivery of Documents to Sub-Advisor. The Advisor has furnished the
Sub-Advisor with copies of each of the following documents:
(a) The Declaration of Trust of the Trust as in effect on the date hereof,
(b) The By-laws of the Trust in effect on the date hereof,
(c) The resolutions of the Trustees approving the engagement of the
Sub-Advisor as Sub-Advisor to the Advisor and approving the form of this
agreement;
(d) The resolutions of the Trustees selecting the Advisor as Advisor to the
Trust and approving the form of the Advisor's Management Agreement with the
Trust;
(e) The Advisor's Management Agreement with the Trust;
(f) The Code of Ethics of the Trust and of the Advisor as currently in
effect; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio because of nonpublic information regarding such companies
that is available to Advisor or the Trust, or which, in the sole opinion of the
Advisor, it believes such non-public information would be deemed to be available
to Advisor and/or the Trust.
The Advisor will furnish the Sub-Advisor from time to time with copies,
properly. certified or otherwise authenticated of all amendments of or
supplements to the foregoing, if any. Such amendments or supplements as to
items (a) through (f) above will be provided within 30 days of the time such
materials became available to the Advisor. Such amendments or supplements as
to item (g) above will be provided not later than the end of the business day
next following the date such amendments or supplements become known to the
Advisor.
3. Delivery of Documents to the Advisor. The Sub-Advisor has furnished the
Advisor with copies of each of the following documents:
(a) The Sub-Advisor's Form ADV as filed with the Securities and Exchange
Commission;
(b) The Sub-Advisor's most recent balance sheet;
(c) Separate lists of persons who the Sub-Advisor wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio;
(d) The Code of Ethics of the Sub-Advisor as currently in effect.
The Sub-Advisor will furnish the Advisor from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any. Such amendments or supplements as to
items (a) through (d) above will be provided within 30 days of the time such
materials became available to the Sub-Advisor.
4. Investment Advisory Facilities. The Sub-Advisor, at its expense, will
furnish all necessary investment facilities, including salaries of personnel
required for it to execute its duties faithfully.
5. Execution of Portfolio Transactions Sub-Advisor is responsible for
decisions to buy and sell securities for the Portfolio, broker-dealer
selection, and negotiation of its brokerage commission rates. Sub-Advisor
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, or as the
Board of Trustees may determine from time to time. Generally, Sub-Advisors
primary consideration in placing Portfolio securities transactions with
broker-dealers for execution is to obtain and maintain the availability of
best execution at the best net price and in the most effective manner
possible. The Sub-Advisor may consider sale of shares of the Portfolio, as
well as recommendations of the Advisor, subject to the requirements of best
net price and most favorable execution.
Consistent with this policy, the Sub-Advisor will take the following
into consideration: the best net 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 continual
basis. Accordingly, the cost of the brokerage commissions to the Portfolio
may be greater than that available from other brokers if the difference is
reasonably justified by other aspects of the portfolio execution services
offered. Subject to such policies and procedures as the Board of Trustees of
the Trust may determine, the Sub-Advisor shall not be deemed to' have acted
unlawfully or to have breached any duty solely by reason of its having caused
the Portfolio to pay a broker dealer that provides such services to the
Sub-Advisor for the Portfolio's use 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 on, if the
Sub-Advisor determines in good faith that such amount of commission was
reasonable hi relation to the value of the research services provided by such
broker, viewed in terms of either that particular transaction or the
Sub-Advisors ongoing responsibilities with respect to the Portfolio. The
Sub-Advisor is further authorized to allocate the orders placed by it on
behalf of the Portfolio to such broker-dealers who also provide research or
statistical material, or other services to the Portfolio or the Sub-Advisor.
Such allocation shall be in such amounts and proposals as the Sub-Advisor
shall determine and the Sub-Advisor will report on said allocations to the
Advisor as requested by the Advisor and, in any event, at least once each
calendar year if no specific request is made, indicating the brokers to whom
such allocations have been made and the basis therefor.
6. Reports by Sub-Advisor. The Sub-Advisor shall furnish the Advisor monthly,
quarterly and annual reports concerning transactions and performance of the
Portfolio, including information required in the Trust's Registration, in
such form as may be mutually agreed, to review the Portfolio and discuss the
management of it. The Sub-Advisor shall permit the financial statements,
books and with respect to the Portfolio to be inspected and audited by the
Trust, the Advisor or their agents at all reasonable times during normal
business hours. The Sub-Advisor shall immediately notify and forward to both
Advisor and legal counsel for the Trust any legal process served upon it on
behalf of the Advisor or the Trust The Sub-Advisor shall promptly notify the
Advisor of any changes in any information required to be disclosed in the
Trust's registration statement
7. Compensation of Sub-Advisor. The amount of the compensation to the
Sub-Advisor is computed at an annual rate. The fee is payable monthly in
arrears, based on the average daily net assets of the Portfolio for each
month, at the annual rates shown below.
For all services rendered, the Advisor will calculate and pay the
Sub-Advisor at the annual rate of: .50 of 1% of' the portion of the net
assets of the Portfolio not in excess of $25 million; plus .35 of 1% of the
portion of the net assets over $25 million but not in excess of $50 million;
and .25 of 1% of the portion in excess of $50 million.
In computing the fee to be paid to the Sub-Advisor, the net asset value
of the Portfolio shall be valued as set forth in the then current
registration statement of the Trust. If this agreement is terminated, the
payment shall be prorated to the date of termination.
Advisor and Sub-Advisor shall not be considered as partners or
participants in a joint venture. Sub-Advisor will pay its own owners for the
services to be provided pursuant to this Agreement and will not be obligated
to pay any a of Advisor of the Trust. Except as otherwise provided herein,
Advisor and the Trust will not be obligated to pay any expenses of
Sub-Advisor.
8. Confidential Treatment It is understood that any information or
recommendation supplied by the Sub-Advisor in connection with the performance
of its obligations hereunder is to be regarded as confidential and for use
only by the Advisor, the Trust or such persons the Advisor may designate in
connection with the Portfolio. It is also understood that any information
supplied to Sub-Advisor in connection with the performance of its obligations
hereunder, particularly, but not limited to, any list of securities which, on
a temporary basis, may not be bought or sold for the Portfolio, is to be
regarded as confidential and for use only by the Sub-Advisor in connection
with its obligation to provide investment advice and other services to the
Portfolio.
9. Representations of the Parties. Each party to this Agreement hereby
acknowledges that it is registered as an investment advisor under the
Investment Advisers Act of 1940, it will use its reasonable best efforts to
maintain such registration, and it will promptly notify the other if it ceases
to be so registered, if its registration is suspended for any reason, or if it
is notified by any regulatory organization or court of competent jurisdiction
that it should show cause why its registration should not be suspended or
terminated.
The Trust represents, warrants and agrees that:
A. The Sub-Advisor has been duly appointed by the Trustees of the Trust to
provide investment advice to the Portfolio as contemplated hereby;
B. The Trust will deliver to the Sub-Advisor a true and complete copy
of its then current prospectus as amended or supplemented from time to time
and such other documents or instruments governing the investment of the
Portfolio and such other information as is necessary for the Sub-Advisor to
carry out its obligations under this Agreement; and
C. The Trust is currently in compliance and shall at all times comply
with the requirements imposed upon the Trust by applicable laws and
regulations.
10. Liability, The Sub-Advisor shall use its best efforts and good faith in
the performance of its services hereunder. However, so long as the Sub-Advisor
has acted in good faith and has used its best efforts, then in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard for its
obligations hereunder, it shall not be liable to the Trust or its shareholders
or to the Advisor for any act or omission resulting in any loss suffered in
any portfolio of the Trust in connection with any service to be provided
herein. The Federal 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 Advisor
may have under applicable law.
The Advisor agrees that the Sub-Advisor shall not be liable for any
failure to recommend the purchase or sale of any security on behalf of the
Portfolio on the basis of any information which might, in Sub-Advisor's
opinion, constitute a violation of any federal or state laws, rules or
regulations.
11. Other Activities of Sub-Advisor. Advisor agrees that the Sub-Advisor and
any of its partners or employees, and persons affiliated with it or with any
such partner or employee may render investment management or advisory services
to other investors and institutions, and such investors and institutions may
own, purchase or sell, securities or other interests in property the same as
or similar to those which are selected for purchase, holding or sale for the
Portfolio, and the Sub-Advisor shall be in all free to take action with
respect to investments in securities or other interests in property the same
as or similar to those selected for purchase, holding or sale for the
Portfolio. Purchases and sales of individual securities on behalf of the
Portfolio and other portfolios of the Trust or accounts for other investors or
institution, will be made on a basis that is equitable to all portfolios of
the Trust and other accounts. Nothing in this agreement shall impose upon the
Sub-Advisor any obligation to purchase or sell or recommend for purchase or
sale, for the Portfolio any security which it, its partners, affiliates or
employees may purchase or sell for the Sub-Advisor or such partner's,
affiliate's or employee's own accounts or for the account of any other client,
advisory or otherwise.
12. Continuance and Termination. This Agreement shall remain in full force and
effect for one year from the date hereof, and is renewable annually thereafter
by specific approval of the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of the Portfolio. Any such
renewal shall be approved by the vote of a majority of the Trustees who are
not interested persons under the ICA, cast in person at a meeting called for
the purpose of voting on such renewal. This agreement may be terminated
without penalty at any time by the Advisor or Sub-Advisor upon 60 days written
notice, and will automatically terminate in the event of its assignment by
either party to this Agreement as defined in the ICA, or (provided Sub-Advisor
has received prior written notice thereof) upon termination Of the Advisors
Management Agreement with the Trust.
13. Notification. Sub-Advisor will notify the Advisor within a reasonable
time of any change in the personnel of the Sub-Advisor with responsibility
for making investment decisions in relation to the Portfolio or who have been
audited to give instructions to a Custodian of the Trust.
Any notice, instruction or other communication required or
contemplated by this agreement shall be in writing. All such communications
shall be addressed to the recipient at the address set forth below, provided
that either party may, by notice, designate a different address for such
party.
Advisor: American Skandia Investment Services,
Incorporated
Attention: Xxxxxx Xxxxxxxxxx
Chief Operating Officer
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Sub-Advisor: X. Xxxx Price Associates, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx , Esq.
14. Indemnification. The Sub-Advisor agrees to indemnify and hold harmless
Advisor, any affiliated person within the meaning of Section 2(a)(3) of the
1940 Act ("affiliated person') of Advisor and each person, if any who, within
the meaning of Section 15 of the Securities Act of 1933 (the "1933 Act"),
controls ("controlling person") Advisor, against any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses), to which Advisor or such affiliated person or controlling person
may become subject under the 1933 Act, the 1940 Act, the Investment Advisees
Act of 1940 ("Advisees Act"), under any other statute, at common law or
otherwise arising out of Sub-Advisor's responsibilities as portfolio manager
of the Portfolio (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by Sub-Advisor, any of
Sub-Advisor's employees or representatives or any affiliate of or any person
acting on behalf of Sub-Advisor, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in a prospectus or
statement of additional information covering the Portfolio or the Trust or
any amendment thereof or any supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, if such a statement
or omission was made in reliance upon written information furnished to
Advisor, the Trust or any affiliated person of the Advisor or the Trust or
upon verbal information confirmed by the Sub-Advisor in writing or (3) to the
extent of, and as a result of, the failure of the Sub-Advisor to execute, or
cause to be executed, Portfolio transactions according to the standards and
requirements of the 1940 Act; provided, however, that in no case is
Sub-Advisor's indemnity in favor of Advisor or any affiliated person or
controlling person of Advisor deemed to protect such person against any
liability to which any such person would otherwise be subject by reason of
willful misconduct bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement.
The Advisor agrees to indemnify and hold harmless Sub-Advisor, any
affiliated person within the meaning of Section 2(a)(3) of the 1940 Act
('affiliated person") of Sub-Advisor and each person, if any who, within the
meaning Of Section 15 of the Securities Act of 1933 (the ."1933 Act"),
controls ("controlling person") Sub-Advisor, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and
other expenses), to which Sub-Advisor or such affiliated person or
controlling person may become subject under the 1933 Act, the 1940 Act the
Investment Adviser's Act of 1940 ('Advisees Act"), under any other statute,
at common law or otherwise, arising out of Advisors responsibilities as
Advisor of the Portfolio (1) to the extent of and as a result of the willful
misconduct. bad faith, or gross negligence by Advisor, any of Advisor's
employees or representatives or any of or any person acting on behalf of
Advisor, or (2) as a result of any untrue statement or alleged untrue
statement of a material fact contained in a prospectus or statement of
additional information covering the Portfolio or the Trust or any amendment
thereof or any supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statement therein not misleading, if such a statement or omission
was made by the Trust other than in reliance upon written information
furnished by Sub-Advisor, or any affiliated person of the Sub-Advisor or
other than upon verbal information confirmed by the Sub-Advisor in writing,
provided, however, that in no case is Advisor's indemnity in favor of
Sub-Advisor or any affiliated person or controlling person of Sub-Advisor
deemed to protect such person against any liability to which any such person
would otherwise be subject by man of willful misconduct, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement.
15. Warranty. The Advisor represents and wan-ants that (i) the appointment of
the Sub-Advisor by the Advisor has been duly authorized and (ii) it has acted
and will continue to act in connection with the transactions contemplated
hereby, and the transactions contemplated hereby are, in conformity with the
Investment Company Act of 1940, the Trusts governing documents and other
applicable laws.
The Sub-Advisor represents and warrants that it is authorized to
perform the services contemplated to be performed hereunder.
16. Governing Law. This agreement is made under, and shall be governed by and
construed in accordance with, the laws of the State of Connecticut.
17. Assignment. No assignment of this Agreement shall be made by either
party, and this Agreement shall automatically terminate in the event of such
assignment. The Sub-Advisor shall notify the Portfolio in writing
sufficiently in advance of any proposed change of control, as will enable the
Trust to consider whether an assignment will occur, and to take the steps
necessary to enter into a new contract with the Sub-Advisor.
18. Amendment. This Agreement may be amended at any time, but only by written
agreement between the Advisor and Sub-Advisor, which amendment is subject to
the approval of the Trustees and the shareholders of the Trust in the manner
required by the Act.
The effective date of this agreement is January 3, 1994
FOR THE ADVISOR: FOR THE SUB-ADVISOR:
/s/Xxxxxx Xxxxxxxxxx /s/Xxxxx X. Xxxxxx
Xxxxxx Xxxxxxxxxx Xxxxx X. Xxxxxx
President & Chief Operating Officer
Date: December 22, 1993 Date: December 28, 1993
------------------ -----------------
Attest: /s/Xxxxxxxx Xxxxxx Attest: /s/Xxxxx Xxxxxx
Xxxxxxxx Xxxxxx Xxxxx Xxxxxx
