INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 3rd day of January, 1994, by and
between American Skandia Trust, a Massachusetts business trust (the "Fund'),
and American Skandia Life Investment Management, Inc., a Connecticut
corporation (the "Investment Manager");
W I T N E S E T H
WHEREAS, the Fund is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder, and
WHEREAS, the Investment Manager is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"); and
WEREAS, the Fund and the Investment Manager desire to enter into
an agreement to provide for the management of the assets of the Federated High
Yield Portfolio of the Fund (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 Fund's Board of Trustees. The Investment Manager will 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 Fund's Board of 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 Board of Trustees of the Fund on a
regular basis, written financial reports and analyses on the Portfolios
securities transactions and the operations of comparable investment
companies;
(e) 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 whether 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 Investment Manager considers desirable for
inclusion in the Portfolio;
(f) determine what issuers and securities shall be
represented in the Portfolio's portfolio and regularly report them in writing
to the Board of Trustees;
(g) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly report in
writing thereon to the Board of Trustees; and
(h) take, on behalf of the Portfolio, all actions which
appear to the Fund necessary to carry into effect such purchase and sale
programs and supervisory functions as aforesaid, including the placing of
orders for the purchase and We 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 its 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 Fund's Prospectus and Statement of Additional information, or
as the Board of Trustees may determine from time to time. Generally, the
Investment Manager's primary consideration in placing Portfolio securities
transactions with broker-dealers for execution is to obtain and maintain the
availability of, execution at the best net price and in the most effective
manner possible The Investment Manager may consider sale of the shares of the
Portfolio, subject to the requirements of best net price and most favorable
execution.
Consistent with this policy, the Investment Manager 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 continuing 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 Fund may determine, the Investment Manager
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 or dealer
that provides research services to the Investment Manager for the Portfolio's
use an amount of commission for effecting a portfolio investment transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that action, if the Investment Manager, determines in
good faith that such amount of commission was reasonable in relation to the
value of the research services provided by such broker, viewed in terms of
either that particular transaction or the Investment Manager's ongoing
responsibilities with respect to the Portfolio. The Investment Manager is
further authorized to allocate the orders placed by it an behalf of the
Portfolio to such brokers and dealers who also provide research or
statistical material or other services to the Fund or the Investment Manager.
Such allocation shall be in such amounts and proportions as the Investment
Manager shall determine and the Investment Manager will report on said
allocations to the Board of Trustees of the Fund regularly as requested by
the Board 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 there
4. Control by Board of 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
Fund pursuant thereto, shall at all times be subject to any directives of the
Board of Trustees of the Fund.
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 Investment Company
Act and Investment Advisers Act and any rules and regulations adopted
thereunder, as amended; and
(b) the provisions of the Registration Statements of the
Fund under the Securities Act of 1933 and the Investment Company Act,
including the investment objectives, policies and restrictions, and
permissible investments specified therein; and
(c) the provisions of the Declaration of Trust of the Fund, as amended; and
(d) the provisions of the By-laws of the Fund, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense
and without cost to the Fund, the services of a President, Secretary, and one
or more Vice Presidents of the Fund, to the extent at such additional
officers may be required by the Fund for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its
expense and without cost to the Fund, a trading function in order to carry
out its obligations under subparagraphs (f), (g) and (h) 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 Fund whose normal duties consist of
maintaining the financial accounts and books and records of the
Fund, 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 Fund 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 Fund
shall reimburse the Investment Manager therefor upon proper
accounting.
(d) All of the ordinary business expenses incurred in the
operations of the Fund and the offering of its shares shall be borne by the
Fund unless specifically provided otherwise in this paragraph 6. These
expenses include but are not limited to brokerage commissions, legal
auditing, taxes or governmental fees, the cost of preparing share
certificates, custodian, depository, transfer and shareholder service agent
costs, expenses of issue, sale, redemption and repurchase of shares, expenses
of registering and qualifying shares for sale, insurance premiums on property
or personnel (including officers and trustees if available) of the Fund which
inure to its benefit, expenses relating to trustee and shareholder meetings,
the cost of preparing and distributing reports and notices to shareholders,
the fees and other expenses incurred by the Fund in connection with
membership in investment company organizations and the cost of printing
copies of prospectuses and statements of additional information distributed
to shareholders.
7. Delegation of Responsibilities. Upon the request of the
Fund's Board of Trustees, the Investment Manager may perform on behalf of the
Fund which are not required by this Agreement. Such services will be
performed on behalf of the Fund and the Investment Manager's cost in
rendering such services may be billed monthly to the Fund, subject to
examination by the Fund's independent accountants. Payment or assumption by
the Investment Manager of any Fund 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 Fund nor obligate the
Investment Manager to pay or assume any similar Fund expense on any
subsequent occasion.
8. Engagement of Sub-advisors and Broker-Dealers. The Investment
Manager may engage, subject to approval of the Fund's Board of Trustees, and
where required, the shareholders of the Portfolio, a sub-advisor to provide
advisory services in relation to the Portfolio. Under such sub-advisory
agreement, the Investment Manager may delegate to the sub-advisor the duties
outlined in subparagraphs (e), (f), (g) and (h) of paragraph 2 hereof.
9 Compensation. The Fund shall pay the Investment Manager in
full compensation for services rendered hereunder an annual investment
advisory fee, payable monthly, of 0.75% of the Portfolio's average daily net
assets.
10. Expense Limitation. If, for any fiscal year of the Fund, the
total of all ordinary business expenses of the Portfolio, including all
investment advisory and administration fees but excluding brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, would exceed 1.15% of the average daily net assets of the
Portfolio the Investment Manager agrees to pay the Fund such excess expenses,
and if required to do so pursuant to such applicable statute or regulatory
authority, to pay to the Fund such excess expenses no later than the last day
of the first month of the next succeeding fiscal year of the Fund. For the
purposes of this paragraph, the term "fiscal year" shall exclude the portion
of the Fund's current fiscal year which shall have elapsed prior to the date
hereof and shall include the portion of the then current fiscal year which
shall have elapsed at the date of termination of this Agreement.
11. Non-Exclusivity- The services of the Investment Manager to
the Portfolio are not to be deemed to be exclusion, 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 Fund, and that officers or trustees of the Fund 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.
12. Term and Approval. This Agreement shall become effective on
January 3, 1994 and shall continue in force and effect from year to year,
provided that such continuance is specifically approved at least annually.-
(a) (i) by the Fund's Board of Trustees or (ii) by the
vote of a majority of the Portfolio's outstanding voting securities (as
defined in Section 2(a)(42) of the Investment Company Act); and
(b) by 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 Fund trustees), by votes cast in person at a
meeting specifically called for such purpose.
13. 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
Fund's Board of 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, the term 'assignment' for the purpose having the
meaning defined in Section 2(a)(4) of the Investment Company Act.
14. Availability 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, trustees or employees, it shall not be
subject to liability to the Fund or to any shareholder of the Portfolio 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
age of any security.
15. Liability of Trustees and Shareholders. A copy of the
Agreement and Declaration of Trust of the Fund 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 of the Fund as trustees and
not individually and that the obligations of this ins t are not binding upon
any of the trustees or shareholders individually but are binding only upon
the assets and property of the Fund. 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 Fund or Investment Manager may have under
applicable law.
16. 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 Fund shall
be IZ Xxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx, 00000, and the address of the
Investment Manager shall be Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000.
17. 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 Investment Company Act,
shall be resolved by reference to such term or provision of the Act 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 said
Act. In addition, where the effect of a requirement of the Investment Company
Act 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.
Attest: AMERICAN SKANDIA TRUST
/s/Xxxx Xxxxxx By: /s/Xxxxxx X. Xxxxxxx
Xxxx Xxxxxx Xxxxxx X. Xxxxxxx
Attest: AMERICAN SKANDIA LIFE INVESTMENT
MANAGEMENT, INC.
/s/Xxxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx X. Xxxxxxxxxx
