Exhibit Number Description
5(mm) Sub-Advisory Agreement between American
Skandia Investment Services, Incorporated and
Janus Capital Corporation for the AST Janus
Overseas Growth Portfolio.
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Janus Capital Corporation (the "Sub-Advisor").
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 Janus Overseas Growth Portfolio
(the "Portfolio") under the terms of a management agreement, dated December 30,
1996, 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 restrictions 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 upon reasonable
request 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 any of the foregoing
documents (the "Documents") before filing with the Securities and Exchange
Commission, if applicable. Any amendments to the Documents will not be deemed
effective with respect to the Sub-Advisor until the Sub-Advisor's 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. Custody of the
Portfolio will be maintained by a custodian bank (the "Custodian") and the
Investment Manager will authorize the Custodian to honor orders and instructions
by employees of the Sub-Advisor designated 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, affecting 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 supplements thereto, and any Proxy
Statement relating to the approval of this Agreement, as filed with the
Securities and Exchange Commission and provided to the Sub-Advisor by the
Investment Manager, and represents and warrants that any disclosure about the
Sub-Advisor or information relating to the Sub-Advisor's activities in
connection with the investment program for the Portfolio, as provided to the
Investment Manager by the Sub-Advisor or as expressly approved by the
Sub-Advisor, incorporated in 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 Sub-Advisor further represents and warrants that it is an investment advisor
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), 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. The 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 communicated to the Sub-Advisor in writing; (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. Notwithstanding the above, the Sub-Advisor shall have
no responsibility to monitor compliance with limitations or restrictions for
which it has not received sufficient information from the Investment Manager or
its authorized agents to enable the Sub-Advisor to monitor compliance with such
limitations or restrictions. Sub-Advisor shall supervise and monitor the
activities of its representatives, personnel and agents in connection with the
investment program of the Portfolio.
Nothing in this Agreement shall be implied to prevent the Investment
Manager from engaging other sub-advisors to provide investment advice and other
services in relation to portfolios of the Trust for which the Sub-Advisor does
not provide such services, or to prevent Investment Manager from providing such
services itself in relation to such portfolios.
The Sub-Advisor shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F on behalf of the Portfolio. The Sub-Advisor shall
not be responsible for the preparation or filing of any other reports required
of the Portfolio by any governmental or regulatory agency, except as expressly
agreed to in writing.
2. Delivery of Documents to the 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 non-public
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. The Investment Manager shall promptly furnish the
Sub-Advisor with additional information as may be reasonably necessary for, or
reasonably requested by, the Sub-Advisor to perform its responsibilities
pursuant to this Agreement.
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 material
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. The Sub-Advisor is responsible for
decisions to buy and sell securities for the Portfolio, broker-dealer selection,
and negotiation of its brokerage commission rates. The Investment Manager shall,
to the extent necessary and within its control, assist in the establishment and
maintenance of brokerage accounts and other accounts the Sub-Advisor deems
advisable to allow for the purchase or sale of securities for the Portfolio
pursuant to this Agreement. 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, including, to the extent permissible
under applicable law, brokers or dealers affiliated with the Sub-Advisor, 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, the Sub-Advisor's 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 the 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 continuing
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 research 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 transaction, if the
Sub-Advisor determines in good faith that such amount of commission was
reasonable in relation to the value of the research services provided by such
broker, viewed in terms of either that particular transaction or the
Sub-Advisor's ongoing responsibilities with respect to the Portfolio and other
accounts serviced by the Sub-Advisor. 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 proportions as the Sub-Advisor shall determine in good faith in
conformity with its responsibilities under applicable laws, rules and
regulations and the Sub-Advisor will report on said allocations to the
Investment Manager regularly as requested by the Investment Manager indicating
the brokers to whom such allocations have been made and the basis therefor.
Purchase or sell orders for the Portfolio may be aggregated with contemporaneous
purchase or sell orders of other clients of the Sub-Advisor to the extent
permissible under applicable law.
The Sub-Advisor shall have no liability for the acts or omissions of
any custodian of the Portfolio's assets. The Sub-Advisor shall have no
responsibility for the segregation requirement of the ICA or other applicable
law.
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
Statement, 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 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. The Sub-Advisor shall promptly notify and
forward to both Investment Manager and 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 relating to the
Sub-Advisor or the Sub-Advisor's activities in connection with the investment
program for the Portfolio. Notwithstanding the foregoing, the Sub-Advisor is not
required to provide proprietary information to the Investment Manager not
otherwise required for the Sub-Advisor to perform its responsibilities pursuant
to this Agreement; nor is the Sub-Advisor responsible for Portfolio accounting
or required to generate information derived from Portfolio accounting data.
7. Compensation of the 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
average daily net assets of the Portfolio not in excess of $100 million; plus
.60 of 1% of the portion of the net assets over $100 million but not in excess
of $500 million; and .50 of 1% of the portion of the net assets over $500
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 expenses for
the services to be provided pursuant to this Agreement and will not be obligated
to pay any expenses of Investment Manager or the Trust. Except as otherwise
provided herein, Investment Manager and the Trust will not be obligated to pay
any expenses of Sub-Advisor. Any reimbursement of management fees required by
any expense limitation provision or in connection with any liability arising out
of its violation of Section 36(b) of the ICA shall be the sole responsibility of
the Investment Manager.
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 (a) it is registered as an investment advisor under the
Advisers Act, that it will use its reasonable best efforts to maintain such
registration, and that 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;
(b) it has been duly incorporated and is validly existing and in good standing
as a corporation under the laws of its state of incorporation; (c) it has all
requisite corporate power and authority under the laws of its state of
incorporation and federal securities laws to execute, deliver and to perform its
obligations under this Agreement; (d) all necessary corporate proceedings have
been duly taken by it to authorize the execution, delivery and performance of
this Agreement; and (e) the shares of the Trust have been duly registered with
the Securities and Exchange Commission to the extent required by applicable law.
The Sub-Advisor further represents that it has adopted a written Code of Ethics
in compliance with Rule 17j-1(b) of the ICA. The Sub-Advisor shall be subject to
such Code of Ethics and shall not be subject to any other Code of Ethics,
including the Investment Manager's Code of Ethics, unless specifically adopted
by the Sub-Advisor.
The Investment Manager acknowledges and agrees that the Sub-Advisor
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 the Sub-Advisor, whether public or private.
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 the 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 respects
free to take action with respect to investments in securities or other interests
in property the same as, similar to or different from 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 institutions 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 authorized 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: Xxxxxx X. Xxxxxxxxxx
President & Chief Operating Officer
Sub-Advisor: Janus Capital Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: General Counsel
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 ICA ("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 ICA, the Advisers
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 by the Sub-Advisor 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 ICA;
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 of Sub-Advisor and each controlling person of
Sub-Advisor, if any, 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 ICA, the Advisers Act, under any other statute, at common law or
otherwise, arising out of Investment Manager's responsibilities as investment
manager of the Portfolio (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by Investment Manager, any of
Investment Manager's employees or representatives or any affiliate 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 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.
15. Warranty. The Investment Manager represents and warrants 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 ICA, the Trust's 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 December 30, 1996.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISOR:
___________________________________ _____________________________
Xxxxxx Xxxxxxxxxx
President & Chief Operating Officer
Date:__________ Date:__________
Attest:____________________________ Attest:______________________
