INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 3rd day of January, 1994 by and
between American Skandia Trust, a Massachusetts business trust (the "Fund"), and
American Skandia Life Investment Management, Inc., 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 Founders
Capital Appreciation 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 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 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 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 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 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 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 (c), (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 .90% of the average daily net assets of the
Portfolio
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 1.30% 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 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
January 3, 1994 and shall continue in 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 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.
Attest: AMERICAN SKANDIA TRUST
/s/Xxxx Xxxxxx By: /s/Xxxxxx X. Xxxxxxx
Xxxx Xxxxxx Xxxxxx X. Xxxxxxx
Attest: AMERICAN SKANDIA LIFE INVESTMENT
MANAGEMENT, INC.
/s/Xxxxxxxx Xxxxxx By: /s/Xxxxxx X. Xxxxxxxxxx
Xxxxxxxx Xxxxxx Xxxxxx X. Xxxxxxxxxx
