AMERICAN SKANDIA TRUST
INVESTMENT MANAGEMENT AGREEMENT
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THIS AGREEMENT is made this 14th day of September, 2001 by and between American Skandia Trust, a Massachusetts
business trust (the "Fund"), and American Skandia Investment Services, Inc., a Connecticut corporation (the
"Investment Manager");
W I T N E S S E T H
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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 PBHG Small-Cap Growth 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 where-of 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
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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
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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 Portfolios 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
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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 the 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 an a continuing basis. Accordingly, the cost of the brokerage
commissions to the Portfolio maybe 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
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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
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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
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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 at 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 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 home 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
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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
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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 (c), (f), (g) and (h) of paragraph
2 hereof
9. Compensation. The Fund shall pay the Investment Manager in full compensation for services rendered
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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. Expense Limitation. If, for any fiscal year of the Fund, the total of all ordinary business expenses of
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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 1.30% 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 a statute or regulatory authority, to pay to the Fund such 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 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
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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 Fund way 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 September 14, 2001 and shall continue in
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force and effect from you 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
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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,
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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
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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
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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
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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.
Attest: AMERICAN SKANDIA TRUST
By:
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Xxxxxx X. Xxxxxxx
Vice President
Attest: AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
By:
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Xxxx Xxxxx
Senior Vice President & Chief Operating
Officer
American Skandia Trust
AST PBHG Small-Cap Growth Portfolio
Investment Management Agreement
EXHIBIT A
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An annual rate of 0.90% of the average daily net assets of the Portfolio.
