SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Pacific Investment Management Company LLC (the
"Sub-Advisor"), a Delaware Limited Liability Company.
WHEREAS American Skandia Trust (the "Trust") is a Massachusetts business trust
organized with one or more series of shares, and is registered as an investment
company under the Investment Company Act of 1940 (the "ICA"); and
WHEREAS the trustees of the Trust (the "Trustees") have engaged the Investment
Manager to act as Investment Manager for the AST PIMCO Limited Maturity Bond
Portfolio (the "Portfolio") under the terms of a management agreement, dated May
1, 1995, with the Trust (the "Management Agreement"); and
WHEREAS the Investment Manager has engaged the Sub-Advisor and the Trustees have
approved the engagement of the Sub-Advisor to provide investment advice and
other investment services set forth below;
NOW, THEREFORE the Investment Manager and the Sub-Advisor agree as follows:
1. Investment Services The Sub-Advisor will furnish the Investment Manager with
investment advisory services in connection with a continuous investment program
for the Portfolio which is to be managed in accordance with the investment
objective, investment policies and actions of the Portfolio as set forth in the
Prospectus and Statement of Additional Information of the Trust and in
accordance with the Trust's Declaration of Trust and By-laws. Officers,
directors, and employees of Sub-Advisor will be available to consult with
Investment Manager and the Trust, their officers, employees and Trustees
concerning the business of the Trust. Investment Manager will promptly furnish
Sub-Advisor with any amendments to such documents. Such amendments will not be
effective with respect to the Sub-Advisor until receipt thereof.
Subject to the supervision and control of the Investment Manager, which is
in turn subject to the supervision and control of the Trust's Board of Trustees,
the Sub-Advisor, will in its discretion determine and select the securities to
be purchased for and sold from the Portfolio from time to time and will place
orders with and give instructions to brokers, dealers and others for all such
transactions and cause such transactions to be executed. 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-Advisor authorized by the Investment Manager 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-Advisor will obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the Portfolio,
and concerning the individual issuers whose securities are included in the
Portfolio or the activities in which they engage, or with respect to securities
which the Sub-Advisor considers desirable for inclusion in the Portfolio.
The Sub-Advisor represents that it reviewed the Registration Statement
of the Trust, including any amendments or supplement thereto, and any Proxy
Statement relating to the approval of this Agreement as filed with the
Securities and Exchange Commission and represents and warrants that with respect
to disclosure about the Sub-Advisor or information relating directly or
indirectly to the Sub-Advisor, such Registration Statement or Proxy Statement
contains, as of the date hereof, no untrue statement of any material fact and
does not omit any statement of material fact which was required to be stated
therein or necessary to make the statements contained therein not misleading.
The Sub-Advisor further represents and warrants that it is an investment advisor
registered under the Investment Advisers Act of 1940, as amended, and under the
laws of all jurisdictions in which the conduct of its business hereunder
requires such registration.
The Sub-Advisor represents that it reviewed the Registration Statement of
the Trust, including any amendments or supplements thereto, and any Proxy
Statement relating to the approval of this Agreement, as filed with the
Securities and Exchange Commission and represents and warrants that with respect
to disclosure about the manager or information relating directly or indirectly
to the Sub-Advisor, such Registration Statement or Proxy Statement contains, as
of the date thereof, no untrue statement of any material fact and does not omit
any statement of material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading. The
Investment Manager further represents and warrants that it is an invest adviser
registered under the ICA and under the laws of all jurisdictions in which the
conduct of its business hereunder requires such registration.
Sub-Advisor shall use its best judgment, effort, and advice in rendering
services under this Agreement.
In furnishing the services under this Agreement, the Sub-Advisor will
comply with the requirements of the ICA and subchapters L and M (including,
respectively, Section 817(h) and Section 851(b)(1), (2), (3) and (4) of the
Internal Revenue Code, applicable to the Portfolio, and the regulations
promulgated thereunder. Sub-Advisor shall comply with (i) other applicable
provisions of state or federal law; (ii) the provision of the Declaration of
Trust and By-laws of the Trust; (iii) policies and determinations of the Trust
and Investment Manager, (iv) the fundamental policies and investment
restrictions of the Trust, as set out in the Trust's registration statement
under the ICA, or as amended by the Trust's shareholders; (v) the Prospectus and
Statement of Additional Information of the Trust; and (vi) investment guidelines
or other instructions received in writing from Investment Manager. Sub-Advisor
shall supervise and monitor the investment program of the Portfolio.
Nothing in this Agreement shall be implied to prevent the Investment
Manager from engaging other Sub-advisors to provide investment advice and other
services in relation to portfolios of the Trust for which Sub-Advisor does not
provide such or to prevent Investment Manager from providing such services
itself in relation to such portfolios.
2. Delivery of Documents to Sub-Advisor. The Investment Manager has
furnished the Sub-Advisor with copies of each of the following documents:
(a) The Declaration of Trust of the Trust as in effect on the date
hereof,
(b) The By-laws of the Trust in effect on the date hereof,
(c) The resolutions of the Trustees approving the engagement of the
Sub-Advisor as Sub-Advisor to the Investment Manager and
approving the form of this agreement;
(d), The resolutions of the Trustees selecting the Investment Manager
as Investment Manager to the Trust and approving the form of the
Investment Manager's Management Agreement with the Trust;
(e) The Investment Manager's Management Agreement with the Trust;
(f) The Code of Ethics of the Trust and of the Investment Manager as
currently in effect; and
(g) A list of companies the securities of which are not to be bought
or sold for the Portfolio because of nonpublic information
regarding such companies that is available to Investment Manager
or the Trust, or which, in the sole opinion of the Investment
Manager, it believes such non-public information would be deemed
to be available to Investment Manager and/or the Trust.
The Investment Manager will furnish the Sub-Advisor 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
became 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.
3. Delivery of Documents to the Investment Manager. The Sub-Advisor has
furnished the Investment Manager with copies of each of the following documents:
(a) The Sub-Advisor's Form ADV as filed with the Securities and
Exchange Commission;
(b) The Sub-Advisor's most recent balance sheet;
(c) Separate lists of persons who the Sub-Advisor wishes to have
authorized to give written and/or oral instructions to Custodians
of Trust assets for the Portfolio;
(d) The Code of Ethics of the Sub-Advisor as currently in effect.
The Sub-Advisor 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 as to items
(a) through (d) above will be provided within 30 days of the time such materials
became available to the Sub-Advisor.
4. Investment Advisory Facilities. The Sub-Advisor, at its expense, will
furnish all necessary investment -------------------------------- facilities,
including salaries of personnel required for it to execute its duties
faithfully.
5. Execution of Portfolio Transactions Sub-Advisor is responsible for
decisions to buy and sell securities for the Portfolio, broker-dealer selection,
and negotiation of its brokerage commission rates. Sub-Advisor 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, or as the Board of Trustees may
determine from time to time. Generally, Sub-Advisors primary consideration in
placing Portfolio securities transactions with broker-dealers for execution is
to obtain and maintain the availability of best execution at the best net price
and in the most effective manner possible. The Sub-Advisor may consider sale of
shares of the Portfolio, as well as recommendations of the Investment Manager,
subject to the requirements of best net price and most favorable execution.
Consistent with this policy, the Sub-Advisor 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 continual basis. Accordingly,
the cost of the brokerage commissions to the Portfolio may be greater than that
available from other brokers if the difference is reasonably justified by other
aspects of the portfolio execution services offered. Subject to such policies
and procedures as the Board of Trustees of the Trust may determine, the
Sub-Advisor shall not be deemed to' have acted unlawfully or to have breached
any duty solely by reason of its having caused the Portfolio to pay a broker
dealer that provides such services to the Sub-Advisor for the Portfolio's use 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 on, if the Sub-Advisor determines in good faith that such amount
of commission was reasonable hi relation to the value of the research services
provided by such broker, viewed in terms of either that particular transaction
or the Sub-Advisors ongoing responsibilities with respect to the Portfolio. The
Sub-Advisor is further authorized to allocate the orders placed by it on behalf
of the Portfolio to such broker-dealers who also provide research or statistical
material, or other services to the Portfolio or the Sub-Advisor. Such allocation
shall be in such amounts and proposals as the Sub-Advisor shall determine and
the Sub-Advisor will report on said allocations to the Investment Manager as
requested by the Investment Manager and, in any event, at least once each
calendar year if no specific request is made, indicating the brokers to whom
such allocations have been made and the basis therefor.
6. Reports by Sub-Advisor. The Sub-Advisor shall furnish the Investment
Manager monthly, quarterly and annual reports concerning transactions and
performance of the Portfolio, including information required in the Trust's
Registration, in such form as may be mutually agreed, to review the Portfolio
and discuss the management of it. The Sub-Advisor shall permit the financial
statements, books and 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. The Sub-Advisor shall immediately notify and
forward to both Investment Manager and legal counsel for the Trust any legal
process served upon it on behalf of the Investment Manager or the Trust The
Sub-Advisor shall promptly notify the Investment Manager of any changes in any
information required to be disclosed in the Trust's Registration Statement
7. Compensation of Sub-Advisor. The amount of the compensation to the
Sub-Advisor is computed at an annual rate. The fee is payable monthly in
arrears, based on the average daily net assets of the Portfolio for each month,
at the annual rates shown below.
For all services rendered, the Investment Manager will calculate and pay
the Sub-Advisor at the annual rate of: .65 of 1% of' the portion of the net
assets of the Portfolio not in excess of $75 million; plus .60 of 1% of the
portion of the net assets over $75 million but not in excess of $150 million;
and .55 of 1% of the portion in excess of $150 million.
In computing the fee to be paid to the Sub-Advisor, the net asset value of
the Portfolio shall be valued as set forth in the then current registration
statement of the Trust. If this agreement is terminated, the payment shall be
prorated to the date of termination.
Investment Manager and Sub-Advisor shall not be considered as partners or
participants in a joint venture. Sub-Advisor will pay its own owners for the
services to be provided pursuant to this Agreement and will not be obligated to
pay any expenses of Investment Manager of the Trust. Except as otherwise
provided herein, Investment Manager and the Trust will not be obligated to pay
any expenses of Sub-Advisor.
8. Confidential Treatment It is understood that any information or
recommendation supplied by the Sub-Advisor 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. It is also understood that any
information supplied to Sub-Advisor in connection with the performance of its
obligations hereunder, particularly, but not limited to, any list of securities
which, on a temporary basis, may not be bought or sold for the Portfolio, is to
be regarded as confidential and for use only by the Sub-Advisor in connection
with its obligation to provide investment advice and other services to the
Portfolio.
9.Representations of the Parties. Each party to this Agreement hereby
acknowledges that it is registered as an investment advisor under the Investment
Advisers Act of 1940, it will use its reasonable best efforts to maintain such
registration, and 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.
10. Liability, The Sub-Advisor shall use its best efforts and good faith in
the performance of its services hereunder. However, so long as the Sub-Advisor
has acted in good faith and has used its best efforts, then in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard for its
obligations hereunder, it shall not be liable to the Trust or its shareholders
or to the Investment Manager for any act or omission resulting in any loss
suffered in any portfolio of the Trust 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 of limitation of any rights which the Trust
or Investment Manager may have under applicable law.
The Investment Manager agrees that the Sub-Advisor shall not be liable for
any failure to recommend the purchase or sale of any security on behalf of the
Portfolio on the basis of any information which might, in Sub-Advisor's opinion,
constitute a violation of any federal or state laws, rules or regulations.
11. Other Activities of Sub-Advisor. Investment Manager agrees that the
Sub-Advisor and any of its partners or employees, and persons affiliated with it
or with any such partner or employee may render investment management or
advisory services to other investors and institutions, and such investors and
institutions may own, purchase or sell, securities or other interests in
property the same as or similar to those which are selected for purchase,
holding or sale for the Portfolio, and the Sub-Advisor shall be in all free to
take action with respect to investments in securities or other interests in
property the same as or similar to those selected for purchase, holding or sale
for the Portfolio. Purchases and sales of individual securities on behalf of the
Portfolio and other portfolios of the Trust or accounts for other investors or
institution, will be made on a basis that is equitable to all portfolios of the
Trust and other accounts. Nothing in this agreement shall impose upon the
Sub-Advisor any obligation to purchase or sell or recommend for purchase or
sale, for the Portfolio any security which it, its partners, affiliates or
employees may purchase or sell for the Sub-Advisor or such partner's,
affiliate's or employee's own accounts or for the account of any other client,
advisory or otherwise.
12. Continuance and Termination. This Agreement shall remain in full force
and effect for one year from the date hereof, and is renewable annually
thereafter 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 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 Sub-Advisor upon 60 days
written notice, and will automatically terminate in the event of its assignment
by either party to this Agreement as defined in the ICA, or (provided
Sub-Advisor has received prior written notice thereof) upon termination Of the
Investment Manager's Management Agreement with the Trust.
13. Notification. Sub-Advisor will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Advisor with
responsibility for making investment decisions in relation to the Portfolio or
who have been audited to give instructions to a Custodian of the Trust.
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 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-Advisor- Pacific Investment Management Company, LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
14. Indemnification. The Sub-Advisor agrees to indemnify and hold harmless
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the 1940 Act ("affiliated person') of Investment Manager and each person, if
any who, within the meaning of Section 15 of the Securities Act of 1933 (the
"1933 Act"), controls ("controlling person") Investment Manager, against any and
all losses, claims, damages, liabilities or litigation (including reasonable
legal and other expenses), to which Investment Manager or such affiliated person
or controlling person may become subject under the 1933 Act, the 1940 Act, the
Investment Advisees Act of 1940 ("Advisees Act"), under any other statute, at
common law or otherwise arising out of Sub-Advisor's responsibilities as
portfolio manager of the Portfolio (1) to the extent of and as a result of the
willful misconduct, bad faith, or gross negligence by Sub-Advisor, any of
Sub-Advisor's employees or representatives or any affiliate of or any person
acting on behalf of Sub-Advisor, or (2) as a result of any untrue statement or
alleged untrue statement of a material fact contained in a prospectus or
statement of additional information covering the Portfolio or the Trust or 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 written information furnished to Investment Manager, the
Trust or any affiliated person of the Investment Manager or the Trust or upon
verbal information confirmed by the Sub-Advisor in writing or (3) to the extent
of, and as a result of, the failure of the Sub-Advisor to execute, or cause to
be executed, Portfolio transactions according to the standards and requirements
of the 1940 Act; provided, however, that in no case is Sub-Advisor's indemnity
in favor of Investment Manager or any affiliated person or controlling person of
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 Sub-Advisor,
any affiliated person within the meaning of Section 2(a)(3) of the 1940 Act
('affiliated person") of Sub-Advisor and each person, if any who, within the
meaning Of Section 15 of the Securities Act of 1933 (the ."1933 Act"), controls
("controlling person") Sub-Advisor, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which Sub-Advisor or such affiliated person or controlling person may become
subject under the 1933 Act, the 1940 Act the Investment Adviser's Act of 1940
('Advisees Act"), under any other statute, at common law or otherwise, arising
out of Investment Managers 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 Investment Manager, any of Investment Manager's
employees or representatives or any of or any person acting on behalf of
Investment Manager, or (2) as a result of any untrue statement or alleged untrue
statement of a material fact contained in a prospectus or statement of
additional information covering the Portfolio or the Trust or 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 by
the Trust other than in reliance upon written information furnished by
Sub-Advisor, or any affiliated person of the Sub-Advisor or other than upon
verbal information confirmed by the Sub-Advisor in writing, provided, however,
that in no case is Investment Manager's indemnity in favor of Sub-Advisor or any
affiliated person or controlling person of Sub-Advisor deemed to protect such
person against any liability to which any such person would otherwise be subject
by man 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.
15. Warranty. The Investment Manager represents and wan-ants that (i) the
appointment of the Sub-Advisor 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 Investment Company Act of 1940, the Trusts governing
documents and other applicable laws.
The Sub-Advisor represents and warrants that it is authorized to perform
the services contemplated to be performed hereunder.
16. Governing Law. This agreement is made under, and shall be governed by
and construed in accordance with, the laws of the State of Connecticut.
The effective date of this agreement is May 5, 2000.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
_________________________________ ______________________________________
Xxxx Xxxxx
Senior Vice President & Chief Operating Officer
Date: __________________________ Date: ____________________________
Attest: ___________________________ Attest: ____________________________
