ALLIANCE CAPITAL MANAGEMENT L.P.
Discretionary Investment Advisory Agreement
with
American Skandia Life Assurance Corporation
-------------------- --------------------------------------------
(Name of Client)
Dated , 2001
-
(Effective Date)
Alliance Capital Management L.P. (the "Adviser") and the undersigned (the "Client") hereby agree as of the above
date that the Adviser shall act as discretionary investment manager with respect to assets of the Client described below (the
"Account") on the following terms and conditions:
1. The Account The Account shall initially consist of cash, cash equivalents, stocks, bonds, and other securities
-----------
or assets the Client places in the Account or which shall become part of the Account as a result of transactions. All cash,
securities and other assets in the Account shall be held by such other party as the Client shall designate as trustee or custodian
(the "Custodian"). The Adviser shall not be responsible for any custodial arrangements involving any assets of the Account or for
the payment of any custodial charges and fees, nor shall the Adviser have possession or custody of any such assets. All payments,
distributions and other transactions in cash, securities or other assets in respect of the Account shall be made directly to or from
the Custodian, and the Adviser shall have no responsibility or liability with respect to transmittal or safekeeping of such cash,
securities or other assets of the Account, or the acts or omissions of the Custodian or others with respect thereto. The Client
agrees to provide or instruct the Custodian to provide to the Adviser such information as the Adviser may reasonably request as being
necessary or appropriate to the performance of the Adviser's responsibilities to the Client under this Agreement.
2. Services of Adviser
-------------------
By execution of this Agreement, the Adviser accepts appointment as investment manager for the Account with full
discretion and agrees to supervise and direct the investments of the Account in strict conformity with any written investment
objectives, policies and restrictions of the Client, including any funding policy, furnished to the Adviser or attached to this
Agreement as an Exhibit, as the same may be amended by the Client from time to time (collectively, the "Investment Policy"). Adviser
will notify Client of any occurrence which would prevent Adviser from acting in strict conformity with such Investment Policy. In
the performance of its services, the Adviser will not be liable for any error in judgment or any acts or omissions to act except
those resulting from the Adviser's negligence, willful misconduct, malfeasance, material breach of this Agreement, violation of law
or reckless disregard of its obligations hereunder. Nothing herein shall in any way constitute a waiver or limitation of any right
of any person under the Federal securities laws or any other applicable federal or state law, rule or regulation. Client retains the
right to appoint other investment managers with respect to any of its assets other than the assets designated in the Account.
At such intervals as shall be mutually agreed upon between the parties, the Adviser shall furnish the Client with a
written report and inventory of the investments in the Account, performance tabulations, a summary of purchases and sales and such
other reports as shall be agreed upon from time to time. The Adviser shall also reconcile accounting, transaction and asset-summary
data with custodian reports at times that are mutually agreeable to the Adviser and the Client. In addition, the Adviser shall
communicate and resolve any significant discrepancies with the Custodian. It is agreed that the Adviser, in the maintenance of its
records, does not assume responsibility for the accuracy of information furnished by the Client or any other person. The Adviser
shall permit the books and records maintained with respect to the Account to be inspected and audited by the Client or its agent at
all times during normal business hours upon reasonable notice. The Adviser shall immediately notify the Client of any legal process
served upon it in connection with the activities hereunder.
4. Investment Objectives, Policies and Restrictions
------------------------------------------------
It will be the Client's responsibility to notify the Adviser in writing of the investment objectives and policies of
the Account, and of any modifications therein, as well as any specific investment restrictions applicable thereto and to give the
Adviser prompt written notice if the Client deems any investments made for the Account to be inconsistent with such objectives,
policies or restrictions. The Client is also required to notify the Adviser in writing of specific restrictions governing the
Account under the current or pending laws of any jurisdiction or by virtue of the terms of any other contract or instrument
purporting to bind the Client or Adviser.
5. Delivery of Client Documentation
--------------------------------
No later than the date of this Agreement, the Client will provide the Adviser with copies of all documents relevant
to the Adviser's management of the Account, (i.e. trust agreement, pension plan documents, by-laws, etc.), including the Investment
Policy. The Client further agrees to promptly deliver to the Adviser true and complete copies of all amendments or supplements to
such documents. The Adviser will be indemnified and held harmless against any and all losses, costs, claims and liabilities which it
may suffer or incur arising out of any failure by the Client to provide to the Adviser the documents required to be furnished in
accordance with the above provisions.
6. Discretionary Authority
-----------------------
The Adviser, whenever it deems appropriate and without prior consultation with the Client, may (i) buy, sell,
exchange, convert, liquidate or otherwise trade in any stock, bonds and other securities (including money market instruments) and
contracts relating to the same, and (ii) subject to the provisions of Section 7 hereof, place orders for the execution of such
transactions with or through such brokers, dealers or issuers as the Adviser in its absolute discretion may select.
It is understood that, to the extent expressly permitted by the Investment Policy referred to above, the Adviser or
an affiliate of the Adviser may also effect transactions for the Account in options and financial futures, stock market index futures
and other commodity contracts. In such event, the Client will execute any additional documentation which the Adviser deems necessary
to enable it or its affiliate to engage in such transactions on behalf of the Account. Client represents and warrants that it is
familiar with the requirements of the Commodity Exchange Act and the National Futures Association pertaining to commodity pool
operators and has determined that it is in compliance with such requirements, to the extent applicable.
7. Allocation of Brokerage
-----------------------
In connection with the investment and reinvestment of the assets of the Account , the Adviser is responsible for the
selection of broker-dealers to execute purchase and sale transactions for the Account in conformity with any policy for brokerage the
Client may determine from time to time and provide to the Adviser in writing (such policy to be subject to the remaining provisions
of this Section 7), as well as the negotiation of brokerage commission rates with such executing broker-dealers. Generally, the
Adviser's primary consideration in placing Account investment transactions with broker-dealers for execution will be to obtain, and
maintain the availability of, best execution at best available price ("Best Execution").
Consistent with this policy, when placing orders for the execution of transactions for the Account, the Adviser may
allocate such transactions to such broker-dealers, for execution on such markets, at such prices and at such commission rates, as in
the good faith judgment of the Adviser will be in the best interests of the Client. In the selection of such broker-dealers and the
negotiation of brokerage commission rates, the Adviser will take into consideration not only the available prices and rates of
brokerage commissions, but also all other relevant factors (such as, without limitation, execution capabilities, financial
responsibility, responsiveness, trading experience, reputation and integrity, facilities, financial services offered, willingness to
commit capital, access to underwriting offerings and secondary markets, reliability in executing trades, record keeping, fairness in
resolving trade disputes, available liquidity, current market conditions, and the value of the expected contribution of the
broker-dealer to the investment performance of the Account on a continuing basis).
Subject to such policies and procedures as the Client may determine and provide to the Adviser in writing and
subject to the Adviser's obligations to seek Best Execution, the Adviser shall have the discretion to effect investment transactions
for the Account through broker-dealers (including to the extent permissible under applicable law, Xxxxxxx X. Xxxxxxxxx & Co., LLC and
other broker-dealers affiliated with the 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 Account to pay any such broker-dealers an amount of commission for effecting an investment transaction in
excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the 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 Adviser's overall responsibilities with
respect to the Account or other accounts as to which the Adviser exercises investment discretion (as such term is defined in section
3(a) of the 1934 Act). Allocations of orders placed by the Adviser on behalf of the Account to such broker-dealers shall be in such
amounts and proportions as the Adviser shall determine in good faith in conformity with its responsibility under applicable laws,
rules and regulations and any applicable exemptions and administrative interpretations set forth in Part II of the Adviser's Form ADV
Registration Statement on file with the Securities and Exchange Commission ("Form ADV"). The Adviser will submit reports on such
allocations to the Client regularly as requested by the Client, in such form as may be mutually agreed upon by the parties hereto,
indicating the broker-dealers to whom such allocations have been made and the basis therefor. In all such dealings, the Affiliated
Broker-Dealers shall be authorized and entitled to retain any commissions, remuneration or profits which may be made in such
transactions and shall not be liable to account for the same to Client.
The Client further authorizes the Adviser and any broker-dealer deemed to be an affiliate of the Adviser
("Affiliated Broker-Dealers") to execute agency cross transactions (the "Agency Cross Transactions") on its behalf. Agency Cross
Transactions are transactions which may be effected by the Affiliated Broker-Dealers acting for both the Client and the counterparty
to the transaction. Agency Cross Transactions enable the Adviser to aggregate purchases or sales of securities for the Client at a
set price and possibly avoid an unfavorable price movement that may be created by placing such purchase or sale order into the
market. As such, the Adviser believes that Agency Cross Transactions can provide meaningful benefits for the Client and its clients
generally. Client should be aware, however, that in an Agency Cross Transaction an Affiliated Broker-Dealer will be receiving
commissions from both sides of the trade and, therefore, there is a potentially conflicting division of loyalties and
responsibilities.
In the event the Client requests that the Adviser direct a portion of the transactions for the Account to one or
more particular broker-dealers, the Adviser will endeavor to comply with such request provided that (i) the Client's request is in
writing and in a form acceptable to the Adviser, (ii) the request indicates a target percentage of trades to be so directed, and
(iii) the terms of such directed brokerage arrangement will not hinder the Adviser's ability to obtain Best Execution for the
Account, as determined by the Adviser in its sole discretion and subject to the provisions of this Agreement.
8. Aggregation of Transactions
---------------------------
The Client authorizes the Adviser in its discretion to aggregate purchases and sales of securities for the Account
with purchases and sales of securities of the same issuer for other clients of the Adviser occurring on the same day. When
transactions are so aggregated, the actual prices applicable to the aggregated transactions will be averaged, and the Account and the
accounts of other participating clients of the Adviser will be deemed to have purchased or sold their proportionate share of the
securities involved at the average price so obtained.
9. Transaction Procedures
----------------------
All transactions will be settled by payment to, or delivery by, the Custodian of all cash, securities or other
assets due to or from the Account. The Adviser may issue such instructions to the Custodian as may be appropriate in connection with
the settlement of transactions initiated by the Adviser. Instructions of the Adviser to the Custodian shall be transmitted in
writing or, at the option of the Adviser, orally and confirmed in writing as soon as practical thereafter. The Adviser will take
reasonable measures to insure that broker-dealers and issuers selected by the Adviser perform their obligations with respect to the
Account. No assets of the Account may be withdrawn other than for settlement of transactions on behalf of the Account except upon
written authorization of the appropriate officers of the Client.
10. Fees
----
The compensation of the Adviser for its services under this Agreement shall be calculated and paid in accordance
with the Fee Schedule attached hereto as Exhibit A, as the same may be amended in writing from time to time by mutual agreement
between the Client and the Adviser. It is understood that, in the event that such fees are to be billed to and paid by the
Custodian, the Client will provide written authorization to the Custodian to pay the fees of the Adviser directly from the Account.
The Client and the Adviser shall not be considered as partners or participants in a joint venture. The 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
Client. The Client will not be obligated to pay any expenses of the Adviser.
11. Confidential Relationship
-------------------------
All information or recommendations provided by the Client or the Custodian to the Adviser shall be held as
confidential by the Adviser; provided, however, as is necessary to carry out the purposes of this Agreement or as may be required by
law, the Adviser shall be permitted to disclose or communicate to a proper party any information received from the Client or the
Custodian or developed by the Adviser under the terms of this Agreement. All recommendations, advice and other work product of the
Adviser developed under the terms of this Agreement and disclosed to the Client or the Custodian shall be held as confidential,
except as required by law. This paragraph shall survive the termination of this Agreement.
Notwithstanding the foregoing, the Client hereby authorizes the Adviser to disclose through whatever means it deems
appropriate (check, sign and date the appropriate boxes below):
(a) Yes No that the Client is an investment management client of the Adviser;
(b) Yes No the type of investment mandate(s) that the Adviser is managing for the Client
from time to time (e.g., domestic equity); and/or
(c) Yes No solely in the limited context of the Adviser's responses to Request for
Proposals, the value of the assets managed for the Client by the Adviser from time to
time.
If the Client does not check either "yes" or "no" to any of the requested disclosure authorizations indicated in (a) through (c)
above, the Client shall be deemed to object to the Adviser disclosing the indicated information. The Client may revoke these
authorizations at any time by written notice to the Adviser.
12. Services to Other Clients
-------------------------
It is understood that the Adviser performs investment advisory services for various clients including other
institutions or investors. The Client agrees that the Adviser may give advice and take action with respect to any of its other
clients which may differ from advice given, or the timing or nature of action taken, with respect to the Account, so long as it is
the Adviser's policy, to the extent practical, to allocate investment opportunities to the Account over a period of time on a fair
and equitable basis relative to other clients.
Nothing in this Agreement shall limit or restrict the Adviser or any of its directors, officers, affiliates or
employees from buying, selling or trading in any securities or other assets for its or their own account or accounts, and the Client
acknowledges that the Adviser, its directors, officers, affiliates and employees, and other clients of the Adviser, may at any time
have, acquire, increase, decrease or dispose of positions in investments which are at the same time being acquired, held or disposed
of for the Account.
The Adviser will not have any obligation to initiate the purchase or sale, or to recommend for purchase or sale, for
the Account any security or other asset which the Adviser, its directors, officers, affiliates or employees may purchase, hold or
sell for its or their own accounts or for the accounts of any other clients of the Adviser.
13. Non-Public Information
----------------------
The Adviser will have no obligation to purchase or sell for the Account the securities of any issuer on the basis of
any material non-public information as may come into its possession.
14. Proxies
-------
The Adviser will deliver all information it receives with respect to the voting of proxies to the Client no later
than ten days following the Adviser's receipt thereof. Upon the Client's request, the Adviser will take such action or render such
advice with respect to the voting of proxies solicited by or with respect to the issuers of securities in which assets of the Account
may be invested from time to time.
15. Representations by Client
-------------------------
The Client represents and warrants that the employment of the Adviser is authorized by the governing documents
relating to the Account and that the terms of this Agreement do not violate any obligation by which the Client is bound, whether
arising by contract, operation of law or otherwise and, if the Client is a person other than a natural person, that (i) this
Agreement has been duly authorized by appropriate action and when executed and delivered will be binding upon the Client in
accordance with its terms and (ii) the Client will deliver to the Adviser such evidence of such authority as the Adviser may
reasonably require.
16. Representations by Adviser
--------------------------
The Adviser represents that (i) it is registered as an investment adviser under the Investment Advisers Act of 1940,
as amended (the "Advisers Act") and is registered or licensed as an investment adviser under the laws of all jurisdictions which
require it to be so registered or licensed, or is exempt from such registration requirements; (ii) it will use its best efforts to
maintain each such registration or license in effect at all times during the term of this Agreement; (iii) it will promptly notify
the Client if it ceases to be so registered, if 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.
17. Indemnification
---------------
The Client agrees to indemnify and hold the Adviser, Adviser's directors, officers, employees, representatives, any
affiliated person of the Adviser and each person, if any who, within the meaning of applicable law, controls the Adviser, harmless
against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the
Adviser or each of them may become subject under any statute, law, rule or regulation, at common law or otherwise, arising out of the
Client's responsibilities hereunder to the extent of and as a result of the negligence, willful misconduct, malfeasance, material
breach of this Agreement, violation of applicable law or reckless disregard of its obligations hereunder by the Client, any of the
Client's directors, officers, employees, representatives or any affiliate of or any person acting on behalf of the Client.
The Adviser agrees to indemnify and hold the Client, Client's directors, officers, employees, representatives, any
affiliated person of the Client and each person, if any who, within the meaning of applicable law, controls the Client, harmless
against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the
Client or each of them may become subject under any statute, law, rule or regulation, at common law or otherwise, arising out of the
Adviser's responsibilities hereunder to the extent of and as a result of the negligence, willful misconduct, malfeasance, material
breach of this Agreement, violation of applicable law or reckless disregard of its obligations hereunder by the Adviser, any of the
Adviser's directors, officers, employees, representatives or any affiliate of or any person acting on behalf of the Adviser.
18. Valuation
---------
In computing the market value of any security held in the Account, which is listed on a national securities
exchange, the Adviser shall value such security through independent, recognized pricing services utilized by the Adviser for pricing
securities held in its advisory accounts generally. Any other security or asset shall be valued in a manner determined in good faith
by the Adviser to reflect its fair market value.
19. Receipt of Disclosure Statement
-------------------------------
The Adviser has provided the Client with the Adviser's most recent balance sheet, a list of those persons authorized
by the Adviser to give written and/or oral instructions to the Custodian; the Adviser's Code of Ethics and Part II of the Adviser's
Form ADV in compliance with Rule 204-3(b) under the Advisers Act more than forty eight (48) hours prior to the date of execution of
this Agreement. The Advisor will furnish the Client from time to time with copies, properly certified or otherwise authenticated, of
all amendments 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 Adviser. Any amendments or supplements to the foregoing will not be deemed effective with
respect to the Client until the Client's receipt thereof. The Adviser will provide additional information as the Client may
reasonably request in connection with the Adviser's performance of its duties under this Agreement.
20. Notices
-------
Unless otherwise specified herein, all notices, instructions and advice with respect to security transactions or any
other matters contemplated by this Agreement shall be deemed duly given when received by the Adviser, the Client and the Custodian,
as applicable, at their respective addresses appearing below. The Adviser may rely upon any written notice from any person who has
been properly authorized by the Client pursuant to paragraph 21 below.
21. Specimen Signatures
-------------------
The Adviser will forward from time to time to the Client and the Custodian a list of names and specimen signatures of persons
authorized to act on behalf of the Adviser. The Client will forward to the Adviser a list of names and specimen signatures of
persons authorized to act on Client's behalf and shall cause the Custodian to forward a like list and specimen signatures to the
Adviser. The Adviser will notify the Client within a reasonable time of any change in the personnel in the Adviser with
responsibility for making investment decisions in relation to the Account or who have been authorized to give instructions to the
--------
Custodian. The Client will notify the Adviser within a reasonable time of any change in the personnel in the Client with
responsibility for making investment decisions in relation to the Account or who have been authorized to give instructions to the
--------
Custodian.
22. Invalid Provisions
------------------
If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future law, such
provision shall be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable provision or its severance from this Agreement.
23. Termination; Assignment; Amendment
----------------------------------
This Agreement may be terminated at any time by either party giving to the other at least thirty (30) days' prior
written notice of such termination. Fees paid in advance of the effectiveness of the termination will be prorated to the date of
termination specified in the notice of termination, and any unearned portion thereof will be refunded to the Client. No assignment,
as that term is defined in the Advisers Act, shall be made by the Adviser without the written consent of the Client. No assignment
shall be deemed to result from changes in the directors, officers or employees of the Adviser except as may be provided in the
Advisers Act. The Adviser agrees that it will notify the Client of any change in the membership of the general partners of the
Adviser within a reasonable time after such change. This Agreement, including the attached exhibits, may be amended or modified at
any time by mutual agreement in writing.
24. Counterparts
------------
This Agreement may be executed in two or more counterparts, each one of which shall be deemed to be an original.
25. Governing Law
-------------
To the extent Federal law and the laws of the State of Connecticut governing insurance separate accounts regulated
by the Connecticut Department of Insurance do not apply, this Agreement shall be construed in accordance with and governed by the
laws of the State of New York.
26. Entire Agreement
----------------
This Agreement constitutes the entire agreement of the parties with respect to management of the Account.
-------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective representatives as of
the date first above written.
NAME OF
CLIENT: American Skandia Life Assurance Corporation
---------------------------------------------------
BY:
--------------------------------------------------
(Print Name and Title)
and
BY:
--------------------------------------------------
(Print Name and Title)
ADDRESS:
ALLIANCE CAPITAL MANAGEMENT L.P.
BY: Alliance Capital Management
Corporation, its General Partner
BY:
------------------------------------------------
Xxxx X. Xxxxxx
Assistant Secretary
ADDRESS: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, X.X. 10105
New Account Documentation
for
American Skandia Life Assurance Corporation
------------------ --------------------------------------------
We will require the following documents to establish our investment management relationship with:
l. Fully executed advisory agreement (with fee schedule attached).
2. Accurate list of securities to be transferred to new account unless initially consisting of cash or cash equivalents.
3. Written statement of investment objectives, guidelines and restrictions and funding policy, if any.
4. Written statement of client's desires, if any, regarding brokerage placement.
5. Form W-9 or W-8.
6. List of Authorized Signatories.
7. Client's authorization of appointment of Alliance as investment adviser.
8. Copy of custodian agreement or similar agreement.
EXHIBIT A
Fee Schedule
------------
The fee for management of the assets in the Account is billed and payable on the last day of each calendar quarter
based upon the value of the average net assets in the Account for each quarter. For purposes of this agreement, average net assets
shall mean the total assets in the applicable Account, including all cash and cash equivalents, accrued interest and the market value
of all securities and other assets as determined by the Manager as of the applicable date of determination less all liabilities
including brokerage commissions (but excluding the Management fee being computed) payable with respect to the Account. If this
Agreement is terminated, the payment described herein shall be prorated to the date of termination.
Two separate fee schedules will apply to the management of Separate Account D (SAD) and the Money Market (MM) account. The
investment management fee schedule for the MM account will decrease as the total assets under management of SAD and MM combined grow.
INSURANCE ASSET MANAGEMENT - SEPARATE ACCOUNT D (SAD)
-----------------------------------------------------
Fee on Account assets only
0.130% on the first $500 million
0.115% on the next $500 million
0.100% on the balance
MONEY MARKET (MM)
-----------------
Fee on MM assets only Assets
------
0.100% if total assets (SAD & MM) are $0 - $500 million
0.080% if total assets (SAD & MM) are $501 - $999 million
0.060% if total assets (SAD & MM) are $1 billion and above
Alliance Investment Company Fees
--------------------------------
Whenever assets in a client's account are invested in an investment company managed by Alliance Capital Management
L.P., the assets in the account invested in the investment company are subjected to the management fee of such company and the above
fee schedule is then applied in full to the remaining assets in the account (excluding the portion invested in the investment
company).
In such event, the client will incur a higher total management fee if the investment company's management fee rate
exceeds the rates reflected in the above schedule. In order to avoid a duplicative charge in respect of the advisory fee paid
directly to Adviser by the investment company, a dollar-for-dollar credit in the amount of the investment company's advisory fee
attributable to the Client's investment in the investment company will be reflected in the quarterly fee statement.
Information regarding the investment companies managed by Alliance and their respective advisory fees is available upon
request.
