AMERICAN SKANDIA TRUST
SUB-ADVISORY AGREEMENT
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THIS AGREEMENT is between American Skandia Investment Services, Incorporated (the "Investment Manager") and Deutsche
Asset Management, Inc. (the "Sub-Adviser").
W I T N E S S E T H
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WHEREAS, American Skandia Trust (the "Trust") is a Massachusetts business trust organized with one or more series of
shares and is registered as an open-end management investment company under the Investment Company Act of 1940, as
amended (the "ICA"); and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment adviser registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the Investment Manager to act as investment
manager for the AST XxXX Large-Cap Value Portfolio (the "Portfolio"), one series of the Trust, under the terms of a
management agreement, dated May 1, 2002 with the Trust (the "Management Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement, wishes to engage the Sub-Adviser, and the
Trustees have approved the engagement of the Sub-Adviser, to provide investment advice and other investment services set
forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a continuous investment program for the
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Portfolio conforming to the investment objective, investment policies and restrictions of the Portfolio as set forth in
the Prospectus and Statement of Additional Information of the Trust as in effect from time to time (together, the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of the Trust, and any investment guidelines
or other instructions received by the Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect to the Sub-Adviser until the
Sub-Adviser's receipt thereof. The appropriate officers and employees of the Sub-Adviser will be available to consult
with the Investment Manager, the Trust and Trustees at reasonable times and upon reasonable notice concerning the
business of the Trust, including valuations of securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA; provided it is understood that the
Sub-Adviser is not responsible for daily pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which in turn is subject to the supervision and
control of the Trustees, the Sub-Adviser in its discretion will determine which issuers and securities will be purchased,
held, sold or exchanged by the Portfolio or otherwise represented in the Portfolio's investment portfolio from time to
time and, subject to the provisions of paragraph 3 of this Agreement, will place orders with and give instructions to
brokers, dealers and others for all such transactions and cause such transactions to be executed. Custody of the
Portfolio will be maintained by a custodian bank (the "Custodian") and the Investment Manager will authorize the
Custodian to honor orders and instructions by employees of the Sub-Adviser designated by the Sub-Adviser 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.
The Sub-Adviser will not be responsible for the provision of administrative, bookkeeping or accounting services
to the Portfolio except as specifically provided herein, as required by the ICA or the Advisers Act or as may be
necessary for the Sub-Adviser to supply to the Investment Manager, the Portfolio or the Portfolio's shareholders the
information required to be provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be the property
of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will comply with and use its best efforts to
enable the Portfolio to conform to the requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapters L and M (including, respectively, Section 817(h) and Sections 851(b)(1), (2) and (3)) of the Internal Revenue
Code and the regulations promulgated thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and determinations of the Trust and the
Investment Manager provided to the Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment policies
and restrictions applicable to the Portfolio, as set out in the Registration Statement in effect, or as such investment
policies and restrictions from time to time may be amended by the Portfolio's shareholders or the Trustees and
communicated to the Sub-Adviser in writing; (vii) the Registration Statement; and (viii) investment guidelines or other
instructions received in writing from the Investment Manager. Notwithstanding the foregoing, the Sub-Adviser shall have
no responsibility to monitor compliance with limitations or restrictions for which information from the Investment
Manager or its authorized agents is required to enable the Sub-Adviser to monitor compliance with such limitations or
restrictions unless such information is provided to the Sub-adviser in writing. The Sub-Adviser shall supervise and
monitor the activities of its representatives, personnel and agents in connection with the investment program of the
Portfolio.
Nothing in this Agreement shall be implied to prevent the Investment Manager from engaging other sub-advisers to
provide investment advice and other services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager from providing such services itself in
relation to the Portfolio or such other series or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of Schedule 13G and Form 13F reflecting the
Portfolio's securities holdings. The Sub-Adviser shall not be responsible for the preparation or filing of any other
reports required of the Portfolio by any governmental or regulatory agency, except as expressly agreed to in writing.
2. Investment Advisory Facilities. The Sub-Adviser, at its expense, will furnish all necessary investment
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facilities, including salaries of personnel, required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and reinvestment of the assets of the
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Portfolio, the Sub-Adviser is responsible for the selection of broker-dealers to execute purchase and sale transactions
for the Portfolio in conformity with the policy regarding brokerage as set forth in the Registration Statement, or as the
Trustees may determine from time to time, as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing Portfolio investment transactions with
broker-dealers for execution will be to obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting broker-dealers and negotiating brokerage commission
rates, 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 Sub-Adviser 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 Sub-Adviser) 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 Sub-Adviser 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 Sub-Adviser's overall
responsibilities with respect to the Portfolio and other accounts as to which the Sub-Adviser exercises investment
discretion (as such term is defined in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the Sub-Adviser
on behalf of the Portfolio to such broker-dealers shall be in such amounts and proportions as the Sub-Adviser shall
determine in good faith in conformity with its responsibilities under applicable laws, rules and regulations. The
Sub-Adviser will submit reports on such allocations to the Investment Manager regularly as requested by the Investment
Manager, in such form as may be mutually agreed to by the parties hereto, indicating the broker-dealers to whom such
allocations have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the Sub-Adviser may also consider sales of shares of the
Portfolio, or may consider or follow recommendations of the Investment Manager that take such sales into account, as
factors in the selection of broker-dealers to effect the Portfolio's investment transactions. Notwithstanding the above,
nothing shall require the Sub-Adviser to use a broker-dealer which provides research services or to use a particular
broker-dealer which the Investment Manager has recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment Manager monthly, quarterly and annual
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reports, as may reasonably be requested by the Investment Manager concerning the transactions, performance, and
compliance of the Portfolio so that the Investment Manager may review such matters and discuss the management of the
Portfolio. The Sub-Adviser shall permit the books and records maintained with respect to the Portfolio to be inspected
and audited by the Trust, the Investment Manager or their respective agents at all reasonable times during normal
business hours upon reasonable notice. The Sub-Adviser shall immediately notify both the Investment Manager and the
Trust of any legal process served upon it in connection with its activities hereunder, including any legal process served
upon it on behalf of the Investment Manager, the Portfolio or the Trust. The Sub-Adviser shall promptly notify the
Investment Manager of (1) any changes in any information regarding the Sub-Adviser or the investment program for the
Portfolio required to be disclosed in the Trust's Registration Statement, or (2) any violation of any requirement,
provision, policy or restriction that the Sub-advisor is required to comply with under Section 1 of this Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the Sub-Adviser is computed at an annual
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rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value of the Portfolio shall be valued as set
forth in the Registration Statement. If this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as partners or participants in a joint
venture. The Sub-Adviser will pay its own expenses for the services to be provided pursuant to this Agreement and will
not be obligated to pay any expenses of the Investment Manager, the Portfolio or the Trust. Except as otherwise
specifically provided herein, the Investment Manager, the Portfolio and the Trust will not be obligated to pay any
expenses of the Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has furnished the Sub-Adviser with true,
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correct and complete copies of each of the following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the Sub-Adviser as portfolio manager of the
Portfolio and approving the form of this Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as investment manager to the Portfolio
and approving the form of the Management Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become available to the
Investment Manager. 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 Investment Manager. Any
amendments or supplements to the foregoing will not be deemed effective with respect to the Sub-Adviser until the
Sub-Adviser's receipt thereof. The Investment Manager will provide such additional information as the Sub-Adviser may
reasonably request in connection with the performance of its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has furnished the Investment Manager with true,
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correct and complete copies of each of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized to give written and/or oral
instructions to Custodians of Trust assets for the Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser will furnish the Investment Manager 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
will be provided within 30 days of the time such materials become available to the Sub-Adviser. Any amendments or
supplements to the foregoing will not be deemed effective with respect to the Investment Manager until the Investment
Manager's receipt thereof. The Sub-Adviser will provide additional information as the Investment Manager may reasonably
request in connection with the Sub-Adviser's performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or recommendation supplied by the
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Sub-Adviser in connection with the performance of its obligations hereunder is to be regarded as confidential and for use
only by the Investment Manager, the Trust or such persons the Investment Manager may designate in connection with the
Portfolio. The parties also understand that any information supplied to the Sub-Adviser in connection with the
performance of its obligations hereunder, particularly, but not limited to, any list of securities which may not be
bought or sold for the Portfolio, is to be regarded as confidential and for use only by the Sub-Adviser in connection
with its obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents and warrants to the other that: (i)
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it is registered as an investment adviser under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so registered or licensed; and (ii) it will
use its reasonable best efforts to maintain each such registration or license in effect at all times during the term of
this Agreement; and (iii) 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; and (iv) it is duly authorized to enter
into this Agreement and to perform its obligations hereunder.
The Investment Manager further represents and warrants to the Sub-Adviser that (i) the appointment of the
Sub-Adviser by the Investment Manager 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 ICA, the Trust's governing documents and other applicable law.
10. Liability. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard for its
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obligations hereunder, the Sub-Adviser shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by the Trust, the Portfolio, the
Portfolio's shareholders or the Investment Manager 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 or limitation of any rights which the Trust, the Portfolio or the Investment Manager
may have under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the Sub-Adviser and any of its partners
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or employees, and persons affiliated with the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that such investors and institutions may own,
purchase or sell, securities or other interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The Investment Manager further acknowledges that the
Sub-Adviser shall be in all respects free to take action with respect to investments in securities or other interests in
property that are the same as, similar to, or different from those selected for purchase, holding or sale for the
Portfolio. The Investment Manager understands that the Sub-Adviser shall not favor or disfavor any of the Sub-Adviser's
clients or class of clients in the allocation of investment opportunities, so that to the extent practical, such
opportunities will be allocated among the Sub-Adviser's clients over a period of time on a fair and equitable basis.
Nothing in this Agreement shall impose upon the Sub-Adviser any obligation (i) to purchase or sell, or recommend for
purchase or sale, for the Portfolio any security which the Sub-Adviser, its partners, affiliates or employees may
purchase or sell for the Sub-Adviser or such partner's, affiliate's or employee's own accounts or for the account of any
other client of the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or sale of any security for
the Sub-Adviser's other clients, advisory or otherwise, which the Investment Manager has placed on the list provided
pursuant to paragraph 6(g) of this Agreement.
12. Continuance and Termination. This Agreement shall remain in full force and effect for one year from the date
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hereof, and is renewable annually thereafter by specific approval of the Trustees 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 Investment Manager or the Sub-Adviser
upon 60 days written notice, and will automatically terminate in the event of (i) its "assignment" by either party to
this Agreement, as such term is defined in the ICA, subject to such exemptions as may be granted by the Securities and
Exchange Commission by rule, regulation or order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a reasonable time of any change in the
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personnel of the Sub-Adviser with responsibility for making investment decisions in relation to the Portfolio (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the Custodian. The Sub-Adviser shall be
responsible for reasonable out-of-pocket costs and expenses incurred by the Investment Manager, the Portfolio or the
Trust to amend or supplement the Trust's Prospectus to reflect a change in Portfolio Manager(s) or otherwise to comply
with the ICA, the Securities Act of 1933, as amended (the "1933 Act") or any other applicable statute, law, rule or
regulation, as a result of such change; provided, however, that the Sub-Adviser shall not be responsible for such costs
and expenses where the change in Portfolio Manager(s) reflects the termination of employment of the Portfolio Manager(s)
with the Sub-Adviser and its affiliates or is the result of a request by the Investment Manager or is due to other
circumstances beyond the Sub-Adviser's control.
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 recipient and/or address for such party.
Investment Manager: American Skandia Investment Services, Incorporated
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Senior Vice President & Chief Operating Officer
Sub-Adviser: Deutsche Asset Management, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxx XXX000000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Trust: American Skandia Trust
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the Investment Manager, any affiliated
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person within the meaning of Section 2(a)(3) of the ICA ("affiliated person") of the Investment Manager and each person,
if any who, within the meaning of Section 15 of the 1933 Act, controls ("controlling person") the Investment Manager,
against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses),
to which the Investment Manager or such affiliated person or controlling person of the Investment Manager may become
subject under the 1933 Act, the ICA, the Advisers Act, under any other statute, law, rule or regulation, at common law or
otherwise, arising out of the Sub-Adviser's responsibilities hereunder (1) to the extent of and as a result of the
willful misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the Sub-Adviser's employees or
representatives or any affiliate of or any person acting on behalf of the Sub-Adviser, or (2) as a result of any untrue
statement or alleged untrue statement of a material fact contained in the Registration Statement, including 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 and in conformity with written information furnished by the Sub-Adviser to the Investment Manager, the
Portfolio, the Trust or any affiliated person of the Investment Manager, the Portfolio or the Trust or upon verbal
information confirmed by the Sub-Adviser in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment transactions according to the requirements of the
ICA; provided, however, that in no case is the Sub-Adviser's indemnity in favor of the Investment Manager or any
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affiliated person or controlling person of the Investment Manager 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 Investment Manager agrees to indemnify and hold harmless the Sub-Adviser, any affiliated person of the
Sub-Adviser and each controlling person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to which the Sub-Adviser or such affiliated
person or controlling person of the Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act, under
any other statute, law, rule or regulation, at common law or otherwise, arising out of the Investment Manager's
responsibilities as investment manager of the Portfolio (1) to the extent of and as a result of the willful misconduct,
bad faith, or gross negligence by the Investment Manager, any of the Investment Manager's employees or representatives or
any affiliate of or any person acting on behalf of the Investment Manager, or (2) as a result of any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, including 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 other than in
reliance upon and in conformity with written information furnished by the Sub-Adviser, or any affiliated person of the
Sub-Adviser or other than upon verbal information confirmed by the Sub-Adviser in writing; provided, however, that in no
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case is the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated person or controlling person of
the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and costs (including reasonable attorneys fees)
incurred by the Sub-Adviser as a result of any litigation brought by the Investment Manager alleging the Sub-Adviser's
failure to perform its obligations and duties in the manner required under this Agreement unless judgment is rendered for
the Investment Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all applicable statutes, laws, rules and
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regulations, including, without limitation, the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any such applicable provision of law or
regulation, the latter shall control. The terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall continue in full
force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed, waived, discharged or terminated only by
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an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is
sought. This Agreement (including Exhibit A hereto) may be amended at any time by written mutual consent of the parties,
subject to the requirements of the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be governed by and construed in accordance with,
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the laws of the State of Connecticut.
18. Severability. Each provision of this Agreement is intended to be severable. If any provision of this Agreement
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is held to be illegal or made invalid by court decision, statute, rule or otherwise, such illegality or invalidity will
not affect the validity or enforceability of the remainder of this Agreement.
The effective date of this agreement is May 1, 2002.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISOR:
______________________________ Name:______________________________
Xxxx Xxxxx
Senior Vice President & Chief Operating Officer Title:________________________________
Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
American Skandia Trust
AST XxXX Large-Cap Value Portfolio
Sub-advisory Agreement
EXHIBIT A
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An annual rate equal to the following percentages of the combined average daily net assets of the Portfolio and the
series of American Skandia Advisor Funds, Inc. that is managed by the Sub-advisor and identified by the Sub-advisor and
the Investment Manager as being similar to the Portfolio: .20% of the portion of the combined average daily net assets
not in excess of $500 million; plus .15% of the portion over $500 million but not in excess of $1 billion; plus .10% of
the portion in excess of $1 billion.
