Exhibit Number Description
5(w) Investment Management Agreement between
Registrant and American Skandia Investment
Services, Incorporated for the AST Xxxxxx
Balanced Portfolio.
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 15th day of October, 1996 by and
between American Skandia Trust, a Massachusetts business trust (the "Fund"), and
American Skandia Investment Services, Incorporated, a Connecticut corporation
(the "Investment Manager");
W I T N E S E T H
WHEREAS, the Fund is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations
promulgated thereunder; and
WHEREAS, the Investment Manager is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Investment
Advisers Act"); and
WHEREAS, the Fund and the Investment Manager desire to enter into
an agreement to provide for the management of the assets of the AST Xxxxxx
Balanced 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
Fund's Board of 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 Fund's Board of 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 Board of Trustees of the Fund on a
regular basis, written financial reports and analyses on the Portfolio's
securities transactions and the operations of comparable investment companies;
(e) 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 whether 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 Investment Manager considers desirable
for inclusion in the Portfolio;
(f) determine what issuers and securities shall be
represented in the Portfolio's portfolio and regularly report them in writing
to the Board of Trustees;
(g) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly report in
writing thereon to the Board of Trustees; and
(h) take, on behalf of the Portfolio, all actions which
appear to the Fund 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 its 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 Fund's Prospectus and Statement of Additional Information, or as the
Board of Trustees may determine from time to time. Generally, the 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. The
Investment Manager may consider sale of the shares of the Portfolio, subject to
the requirements of best net price and most favorable execution.
Consistent with this policy, the 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. 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
Fund may determine, the Investment Manager 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 or dealer that provides research services to the
Investment Manager for the Portfolio's use an amount of commission for effecting
a portfolio investment transaction in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction, if the
Investment Manager, 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 Investment
Manager's ongoing responsibilities with respect to the Portfolio. The Investment
Manager is further authorized to allocate the orders placed by it on behalf of
the Portfolio to such brokers and dealers who also provide research or
statistical material, or other services to the Fund or the Investment Manager.
Such allocation shall be in such amounts and proportions as the Investment
Manager shall determine and the Investment Manager will report on said
allocations to the Board of Trustees of the Fund regularly as requested by the
Board 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.
4. Control by Board of 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 Fund
pursuant thereto, shall at all times be subject to any directives of the Board
of Trustees of the Fund.
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 Investment Company
Act and Investment Advisers Act and any rules and regulations adopted
thereunder, as amended; and
(b) the provisions of the Registration Statements of
the Fund under the Securities Act of 1933 and the Investment Company Act,
including the investment objectives, policies and restrictions, and
permissible investments specified therein; and
(c) the provisions of the Declaration of Trust of the
Fund, as amended; and
(d) the provisions of the By-laws of the Fund, as
amended; and
(e) any other applicable provisions of state and federal
law.
6. Expenses. The expenses connected with the Fund shall be
allocable between the Fund and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense
and without cost to the Fund, the services of a President, Secretary, and one or
more Vice Presidents of the Fund, to the extent that such additional officers
may be required by the Fund for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at
its expense and without cost to the Fund, a trading function in order to carry
out its obligations under subparagraphs (f), (g) and (h) 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 Fund whose normal duties consist of
maintaining the financial accounts and books and records of the
Fund; 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 Fund 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 Fund shall
reimburse the Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in
the operations of the Fund and the offering of its shares shall be borne by the
Fund unless specifically provided otherwise in this paragraph 6. These expenses
include but are not limited to brokerage commissions, legal, auditing, taxes or
governmental fees, the cost of preparing share certificates, custodian,
depository, transfer and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, insurance premiums on property or personnel
(including officers and trustees if available) of the Fund which inure to its
benefit, expenses relating to trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Fund in connection with membership in investment
company organizations and the cost of printing copies of prospectuses and
statements of additional information distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Fund's
Board of Trustees, the Investment Manager may perform services on behalf of the
Fund which are not required by this Agreement. Such services will be performed
on behalf of the Fund and the Investment Manager's cost in rendering such
services may be billed monthly to the Fund, subject to examination by the Fund's
independent accountants. Payment or assumption by the Investment Manager of any
Fund 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 Fund nor obligate the Investment Manager to pay or assume any
similar Fund expense on any subsequent occasion.
8. Engagement of Sub-advisors and Broker-Dealers. The Investment
Manager may engage, subject to approval of the Fund's Board of Trustees, and
where required, the shareholders of the Portfolio, a sub-advisor to provide
advisory services in relation to the Portfolio. Under such sub-advisory
agreement, the Investment Manager may delegate to the sub-advisor the duties
outlined in subparagraphs (e), (f), (g) and (h) of paragraph 2 hereof.
9. Compensation. The Fund shall pay the Investment Manager in
full compensation for services rendered hereunder an annual investment advisory
fee, payable monthly, of .75% of the average daily net assets of the Portfolio
not in excess of $300 million; plus .70% of the Portfolio's average daily net
assets in excess of $300 million.
10. Expense Limitation. If, for any fiscal year of the Fund, the
total of all ordinary business expenses of the Portfolio, including all
investment advisory and administration fees but excluding brokerage commissions
and fees, taxes, interest and extraordinary expenses such as litigation, would
exceed 1.25% of the average daily net assets of the Portfolio, the Investment
Manager agrees to pay the Fund such excess expenses, and if required to do so
pursuant to such applicable statute or regulatory authority, to pay to the Fund
such excess expenses no later than the last day of the first month of the next
succeeding fiscal year of the Fund. For the purposes of this paragraph, the term
"fiscal year" shall exclude the portion of the Fund's current fiscal year which
shall have elapsed prior to the date hereof and shall include the portion of the
then current fiscal year which shall have elapsed at the date of termination of
this Agreement.
11. 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 Fund, and that
officers or trustees of the Fund 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.
12. Term and Approval. This Agreement shall become effective on
October 15, 1996 and shall continue in force and effect from year to year,
provided that such continuance is specifically approved at least annually:
(a) (i) by the Fund's Board of Trustees or (ii) by the
vote of a majority of the Portfolio's outstanding voting securities
(as defined in Section 2(a)(42) of the Investment Company Act); and
(b) by 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 Fund trustees), by votes cast in person at a meeting
specifically called for such purpose.
13. 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 Fund's
Board of 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, the term
"assignment" for the purpose having the meaning defined in Section 2(a)(4) of
the Investment Company Act.
14. 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, trustees or employees, it shall not be subject
to liability to the Fund 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.
15. Liability of Trustees and Shareholders. A copy of the
Agreement and Declaration of Trust of the Fund 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 of the Fund 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 Fund. 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 Fund or Investment Manager may have under applicable law.
16. 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 Fund shall be 000
Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, and the address of the Investment
Manager shall be Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000.
17. 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 Investment Company Act, shall be
resolved by reference to such term or provision of the Act 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 said Act. In
addition, where the effect of a requirement of the Investment Company Act,
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: ___________________________________
Xxxxxx X. Xxxxxxxxxx
___________________________________ President & Chief Operating Officer
