AMERICAN SKANDIA TRUST
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
THIS AGREEMENT is made this 1st day of May, 2001 by and between American Skandia Trust, a Massachusetts business trust
(the "Trust"), and American Skandia Investment Services, Incorporated, a Connecticut corporation (the "Investment
Manager").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Trust is registered as an open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"), and the rules and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement to provide for the management of the
assets of the AST Xxxxxxx Xxxxxxxxx Core Value Portfolio (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 Board of Trustees of the Trust (the "Trustees").
The Investment Manager shall 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 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 Trustees on a regular basis, written financial reports and analyses on the Portfolio's
securities transactions and the operations of comparable investment companies;
(e) determine what issuers and securities shall be represented in the Portfolio's portfolio and regularly report
them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales of the securities of such issuers
and regularly report in writing thereon to the Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid, including the placing of orders for the purchase and
sale 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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from time to time (together, the "Registration
Statement"), or as the Trustees may determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers for execution will be to obtain, and
maintain the availability of, best execution at the best available price. The Investment Manager may consider the sale
of shares of the Portfolio in allocating Portfolio securities transactions, subject to the requirements of best net price
available and most favorable execution.
Consistent with this policy, the Investment Manager, in allocating Portfolio securities transactions, 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 Investment Manager 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 Investment Manager) 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 Investment Manager 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 Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which the Investment Manager exercises investment
discretion (as such term is defined in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the Investment
Manager on behalf of the Portfolio to such broker-dealers shall be in such amounts and proportions as the Investment
Manager shall determine in good faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the Trustees regularly as requested by the
Trustees, indicating the broker-dealers to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto, shall at all
times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules and regulations adopted thereunder;
and
(b) the provisions of the Registration Statement, including the investment objectives, policies and
restrictions, and permissible investments specified therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust, as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable between the Trust and the Investment Manager
--------
as follows:
(a) The Investment Manager shall furnish, at its expense and without cost to the Trust, the services of a
President, Secretary, and one or more Vice Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and without cost to the Trust, a trading
function in order to carry out its obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of maintaining the financial
accounts and books and records of the Trust, 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 Trust 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 Trust shall reimburse the Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of the Trust and the offering of its shares
shall be borne by the Trust unless specifically provided otherwise in this paragraph 6. These expenses include, but are
not limited to: (i) brokerage commissions, legal, auditing, taxes or governmental fees; (ii) the cost of preparing share
certificates; (iii) custodian, depository, transfer and shareholder service agent costs; (iv) expenses of issue, sale,
redemption and repurchase of shares; (v) expenses of registering and qualifying shares for sale; (vi) insurance premiums
on property or personnel (including officers and trustees if available) of the Trust which inure to the Trust's benefit;
(vii) expenses relating to trustee and shareholder meetings; (viii) the cost of preparing and distributing reports and
notices to shareholders; (ix) the fees and other expenses incurred by the Trust in connection with membership in
investment company organizations; and (x) and the cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the Investment Manager may perform services on
------------------------------
behalf of the Trust which are not required by this Agreement. Such services will be performed on behalf of the Trust and
the Investment Manager's cost in rendering such services may be billed monthly to the Trust, subject to examination by
the Trust's independent accountants. Payment or assumption by the Investment Manager of any Trust 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 Trust nor obligate the Investment Manager to pay or assume any similar Trust expense on any
subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager may engage, subject to approval of the
------------------------------------------------
Trustees and where required, the shareholders of the Portfolio, a sub-adviser to provide advisory services in relation to
the Portfolio. Under such sub-advisory agreement, the Investment Manager may delegate to the sub-adviser the duties
outlined in subparagraphs (e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full compensation for services rendered hereunder an
------------
annual investment advisory fee. 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.
10. Non-Exclusivity. The services of the Investment Manager to the Portfolio are not to be deemed to be exclusive,
---------------
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 Trust, and that officers or
trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on May 1, 2001 and by shall continue in force and
------------------
effect from year to year, provided that such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding voting securities (as defined in
Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically
called for such purpose.
12. 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 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," as such term is defined in the ICA.
13. Liability 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, directors or employees, it shall not be subject to liability to the Trust or to any shareholder of the
Portfolio for 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 sale of any security.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and Declaration of Trust of the Trust 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 as trustees and not individually and that the obligations of this instrument are not binding
upon any of the Trustees or shareholders individually but are binding only upon the assets and property of the Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment Manager shall be Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx
00000.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA, 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.
AMERICAN SKANDIA TRUST
Attest: By: ____________________________________
Xxxxxx X. Xxxxxxx
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Xxxx Xxxxx
____________________________________ Senior Vice President & Chief
Operating Officer
American Skandia Trust
AST Xxxxxxx Xxxxxxxxx Core Value Portfolio
Investment Management Agreement
EXHIBIT A
---------
An annual rate of 0.75% of the average daily net assets of the Portfolio.
