SUB-INVESTMENT MANAGEMENT AGREEMENT
This Sub-Investment Management Agreement (this "Agreement") is
entered into as of September 8, 1992 by and between American Skandia Life
Investment Management, Inc., a Connecticut corporation ("Investment Manager")
and Janus Capital Corporation, a Colorado corporation ("Sub-Investment
Manager").
WHEREAS, Investment Manager has entered into an Investment Management
Agreement dated September 8, 1992 (the "Investment Management Agreement") with
American Skandia Trust, a Massachusetts business trust (the "Trust"), to act
as adviser to the JanCap Growth Portfolio, a series of the Trust (the
"Portfolio");
WHEREAS, the Investment Management Agreement provides that Investment
Manager may, engage a sub-investment manager to furnish investment information
and advice to assist Investment Manager in carrying out its responsibilities
under the Investment Management Agreement;
WHEREAS, Investment Manager and the Trustees of the Trust desire to
retain Sub-Investment Manager to render investment adviser services to
Investment Manager in the manner and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, Investment Manager and Sub-Investment
Manager agree as follows:
1. Sub-Investment Management Services.
(a) Sub-Investment Manager shall, subject to the supervision
of Investment Manager, manage the investment and reinvestment of the assets of
the Portfolio. Sub-Investment Manager is authorized, in its discretion and
without prior consultation with Investment Manager, to buy, sell, lend, and
otherwise trade in any stocks, bonds, and other securities and investment
instruments on behalf of the Portfolio, and so long as consistent with the
foregoing, without regard to the length of time the securities have been held
and the resulting rate of portfolio turnover or any tax considerations.
Subject to the investment objectives, policies, and restrictions concerning
the Portfolio set forth in the Trust's declaration of trust and in its
registration statements under the Investment Company Act of 1940, the majority
or the whole of the Portfolio may be invested in such proportions of stocks,
bonds, other securities or investment instruments, or cash as Sub-Investment
Manager shall determine. Sub-Investment Manager is responsible for compliance
with the provisions of Section 817(h) of the Internal Revenue Code of 1986, as
amended, applicable to the Portfolio.
(b) Sub-Investment Manager shall furnish Investment Manager
monthly, quarterly, and annual reports concerning transactions and performance
of the Portfolio in such form as may be mutually agreed upon, and agrees to
review the Portfolio and discuss the management of it. Sub-Investment Manager
shall permit the financial statements, books and records with respect to the
Portfolio to be inspected and audited by the Trust, the Investment Manager, or
their agents at all reasonable times during normal business hours.
Sub-Investment Manager shall immediately notify and forward to Investment
Manager any legal process served upon it on behalf of the Investment Manager
or the Trust. Sub-Investment Manager shall also provide Investment Manager
with such other information and reports as may reasonably be requested by
Investment Manager from time to time. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of Investment Manager and the Trustees of the Trust.
(c) Sub-Investment Manager shall provide to Investment Manager
a copy of Sub-Investment Manager's Form ADV as filed with the Securities and
Exchange Commission and a list of persons who Sub-Investment Manager wishes to
have authorized to give written and/or oral instructions to Custodians of Trust
assets for the Portfolio. Sub-Investment Manager will furnish Investment Manager
from time to time with copies, properly certified or otherwise authenticated, of
all amendments or supplements to the foregoing, if any, as soon as reasonably
practicable.
2. Obligations of Investment Manager and the Portfolio.
(a) Investment Manager regarding such matters as the
composition of assets in the Portfolio, cash requirements and cash available for
investment in the Portfolio, and all other information as may be reasonably
necessary for Sub-Investment Manager to perform its responsibilities hereunder.
(b) Investment Manager has herewith furnished Sub-Investment
Manager a copy of the Portfolio's registration statement currently in effect and
agrees during the continuance of this Agreement to furnish Sub-Investment
Manager copies of any amendments or supplements thereto before or at the time
the amendments or supplements become effective. Investment Manager agrees to
furnish Sub-Investment Manager with minutes of meetings of the Trustees of the
Trust applicable to the Portfolio to the extent they may affect the duties of
Investment Manager, a certified copy of any financial statements or reports
prepared for the Trust, including the Portfolio, by certified or independent
public accountants, and with copies of any financial statements or reports made
by the Portfolio to its shareholders or to any governmental body or securities
exchange, and any further materials or information which Sub-Investment Manager
may reasonably request to enable it to perform its functions under this
Agreement.
(c) Investment Manager shall provide Sub-Investment Manager
with reports of its administrator, Provident Financial Processing Corporation,
on the monitoring of the Portfolio for compliance with the requirements of
Section 817(h) of the IRC and the rules promulgated thereunder.
3. Custodian. Investment Manager shall provide Sub-Investment Manager
with a copy of the Portfolio's agreement with the Custodian (the "Custodian")
designated to hold the assets in the Portfolio and any modification thereto (the
"Custody Agreement") in advance. The Portfolio assets shall be maintained in the
custody of the Custodian identified in, and in accordance with the terms and
conditions of, the Custody Agreement. Sub-Investment Manager shall have no
liability for the acts or omissions of the Custodian. Any assets added to the
Portfolio shall be delivered directly to the Custodian.
4. Rights. Investment Manager agrees and acknowledges that
Sub-Investment Manager is the sole owner of the name and xxxx "Xxxxx" and that
all use of any designation comprised in whole or part of Janus (a "Xxxxx Xxxx")
under this Agreement shall inure, to the benefit of Sub-Investment Manager. The
use by Investment Manager on its own behalf or on behalf of the Portfolio of any
Xxxxx Xxxx in any advertisement or sales literature or other materials promoting
the Portfolio shall be with the prior written consent of Sub-Investment Manager.
Investment Manager shall not, and Investment Manager shall use its best efforts
to cause the Portfolio not to, without prior written consent of Sub-Investment
Manager, make representations regarding Sub-Investment Manager in any disclosure
document, advertisement or sales literature or other materials promoting the
Portfolio. Upon termination of this Agreement for any reason, Investment Manager
shall cease, and Investment Manager shall use its best efforts to cause the
Portfolio to cease, all use of any Xxxxx Xxxx(s) as soon as reasonably
practicable.
5. Expenses. Investment Manager shall assume and pay all its
organizational, operational, and business expenses not specifically assumed or
agreed to be paid by Sub-Investment Manager pursuant hereto, including, without
limitation, (a) interest and taxes; (b) brokerage commissions and other costs in
connection with the purchase or sale of securities or investment instruments
with respect to the Portfolio; and (c) custodian fees and expenses. Any
reimbursement of advisory fees required by any expense limitation provision
shall be the sole responsibility of Investment Manager. Investment Manager and
Sub-Investment Manager shall not be considered as partners or participants in a
joint venture. Sub-Investment Manager will pay its own expenses for the services
to be provided pursuant to this Agreement to the extent not assumed by
Investment Manager above, and will not be obligated to pay any expenses of
Investment Manager, the Trust, or the Portfolio.
6. Purchase and Sale of Assets.
(a) Absent instructions from Investment Manager to the
contrary, Sub-Investment Manager shall place all orders for the purchase and
sale of securities for the Portfolio with brokers or dealers selected by
Sub-Investment Manager which may include brokers or dealers affiliated with
Sub-Investment Manager. Sub-Investment Manager shall hold harmless and indemnify
Investment Manager for any loss, liability, cost, damage or expense (including
reasonable attorneys fees and costs) arising from any claim or demand by any
past or present shareholder of the Portfolio arising out of the placement of
orders for the purchase and sale of securities for the Portfolio with brokers or
dealers affiliated with Sub-Investment Manager. Purchase or sell orders for the
Portfolio may be aggregated with contemporaneous purchase or sell orders of
other clients of Sub-Investment Manager. Sub-Investment Manager shall use its
best efforts to obtain execution of Portfolio transactions at prices which are
advantageous to the Portfolio and at commission rates that are reasonable in
relation to the benefits received. However, Sub-Investment Manager may select
brokers or dealers on the basis that they provide brokerage, research, or other
services or products to the Portfolio and/or other accounts serviced by
Sub-Investment Manager, provided that Sub-Investment Manager shall use its best
efforts to ensure that such services benefit Sub-Investment Manager's accounts,
including the Portfolio, equitably. Sub-Investment Manager may pay a broker or
dealer an amount of commission for effecting a securities transaction in excess
of the amount of commission or dealer spread another broker or dealer would have
charged for effecting that transaction if Sub-Investment Manager deals in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research products and/or services provided by such broker or
dealer. This determination, with respect to brokerage and research services or
products, may be viewed m terms of either that particular transaction or the
overall responsibilities which Sub-Investment Manager and its affiliates have
with respect to the Portfolio and to accounts over which they exercise
investment discretion, and not all such services or products may be used by
Sub-Investment Manager in managing the Portfolio. Sub-Investment Manager shall
report on allocations of brokerage transactions effected by affiliated brokers
to Investment Manager in accordance with procedures agreed upon by Investment
Manager and Sub-Investment Manager.
(b) Generally, Sub-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. Sub-Investment
Manager may consider sale of the shares of the Portfolio, as well as
recommendations of Investment Manager, subject to the requirements of best net
price and most favorable execution. Consistent with this policy,
Sub-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.
7. Compensation of Sub-Investment Manager. Investment Manager shall
pay to Sub-Investment Manager a monthly fee in accordance with the fee
schedule attached to this Agreement. Monthly fees shall be calculated by
Investment Manager based upon the average daily net assets of the Portfolio
(including cash or cash equivalents) for the preceding month for investment
advisory services rendered during that preceding month, and shall be payable
to Sub-Investment Manager by the fifteenth day of the succeeding month. The
fee for the first month during which Sub-Investment Manager shall render
investment advisory services under Agreement shall be based upon the number
of days the account was open in that month. If this Agreement is terminated,
the fee shall be based upon the number of days the account was open during
the month in which the Agreement is terminated.
8. Non-Exclusivity. Investment Manager and the Portfolio agree that
the services of Sub-Investment Manager are not to be deemed exclusive and that
Sub-Investment Manager and its affiliates are free to act as investment
manager and provide other services to various investment companies and other
managed accounts. This Agreement shall not in any way limit or restrict
Sub-Investment Manager or any of its directors, officers, employees, or agents
from buying, selling, or trading any securities or other investment
instruments for its or their own account or for the account of others for whom
it or they may be acting, provided that such activities will not adversely
affect or otherwise impair the performance by Sub-Investment Manager of its
duties and obligations under this Agreement. Investment Manager and the
Portfolio, recognize and agree that Sub-Investment Manager may provide advice
to or take action with it to other clients, which advice or action, including
the timing and nature of such action, may differ from or be identical to
advice given or action taken with respect to the Portfolio. Sub-Investment
Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise provided or authorized, have no
authority to act for or represent the Portfolio or Investment Manager m any
way or otherwise be deemed an agent of the Portfolio or Investment Manager
other than in furtherance of its duties and responsibilities as set forth in
this Agreement.
9. Liability. Except as may otherwise be provided by the Investment
Company Act of 1940 or federal securities laws, neither Sub-Investment
Manager nor any of its officers, directors, employees, or agents shall be
subject to any liability to Investment Manager, the Portfolio, or any
shareholder of the Portfolio for any error of judgment, mistake of law, or
any loss arising out of any investment or other act or omission in the course
of, connected with, or arising out of any service to be rendered under this
Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement. Investment
Manager and the Portfolio shall hold harmless and indemnify Sub-Investment
Manager for any loss, liability, cost, damage, or expense (including
reasonable attorneys fees and costs) arising from any claim or demand by any
past or present shareholder of the Portfolio that is not based upon the
investment advice provided by Sub-Investment Manager pursuant to this
Agreement. Sub-Investment Manager shall use its best efforts and good faith
in performing its services hereunder, but Investment Manager acknowledges and
agrees that Sub-Investment Manager makes no representation or warranty,
express or implied, that any level of performance or investment results will
be achieved by the Portfolio or that the Portfolio will perform comparably
with any standard or index, including other clients of Sub-Investment
Manager, whether public or private.
10. Termination. This Agreement shall remain in full force and effect
for one year from the date hereof, and is renewable annually thereafter by
agreement of the parties to this Agreement and 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 a
vote of a majority of the Trustees who are not interested persons under the
Investment Company Act of 1940, 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 either party upon 60 days written notice to the other
party, and will automatically terminate in the event of its assignment, as
defined in the Investment Company Act of 1940, or upon termination of the
Investment Manager's Agreement with the Trust.
11. Amendment. This Agreement may be amended only if such amendment is
specifically approved by (a) the vote of a majority of the outstanding voting
securities of the Portfolio, if required by applicable law, and (b) the vote
of a majority of those directors of the Portfolio who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
12. General.
(a) Sub-Investment Manager may perform its services through any
employee, officer, or agent of Sub-Investment Manager, and Investment Manager
shall not be entitled to the advice, recommendation, or judgment of any
specific person.
(b) If any term or provision or this Agreement or the application
thereof to any, person or circumstances is held to be invalid or
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
law.
(c) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Colorado exclusive of conflicts of laws.
AMERICAN SKANDIA LIFE
INVESTMENT MANAGEMENT INC.
By /s/Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
Attest:
/s/Xxxx Xxxxx X'Xxxxx
Xxxx Xxxxx X'Xxxxx
Title: Staff Counsel
JANUS CAPITAL CORPORATION
By: /s/Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
Attest:
/s/Xxxxxxxxx X. Stetle
Xxxxxxxxx X. Stetle
Title: Assistant Secretary
