Registration No. 811-8087
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No.
(Check appropriate box or boxes)
----------------------------
AMERICAN SKANDIA MASTER TRUST
(Exact Name of Registrant as Specified in Charter)
Ugland House
P.O. Box 309
South Church Street
George Town, Grand Cayman
Cayman Islands, BWI
(Address of Offshore Administrator)
Telephone Number of Offshore Administrator, including Area Code: (345) 949-6415
Eric C. Freed
1 Corporate Drive
Shelton, Connecticut 06484-0883
(Name and Address of Agent for Service)
----------------------------
With copy to:
Leonard B. Mackey, Jr., Esq.
Rogers & Wells
200 Park Avenue
New York, New York 10166
(212) 878-8000
Robert K. Fulton, Esq.
Werner & Kennedy
1633 Broadway
New York, New York 10019
(212) 408-6900
EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant
pursuant to Section 8(b) of the Investment Company Act of 1940, as amended (the
"1940 Act"). However, beneficial interests in the Registrant are not being
registered under the Securities Act of 1933, as amended (the "1933 Act"), since
such interests will be issued solely in private placement transactions which do
not involve any "public offering" within the meaning of Section 4(2) of the 1933
Act. Investments in the Registrant may only be made by investment companies or
certain other entities which are "accredited investors" within the meaning of
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any beneficial
interests in the Registrant.
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AMERICAN SKANDIA MASTER TRUST
PART A
June 4, 1997
RESPONSES TO ITEMS 1 THROUGH 3 HAVE BEEN OMITTED PURSUANT TO PARAGRAPH 4 OF
INSTRUCTION F OF THE GENERAL INSTRUCTIONS TO FORM N-1A.
Responses to certain Items required to be included in Part A of this
Registration Statement are incorporated by reference from Pre-Effective
Amendment No. 2 of the Registration Statement of American Skandia Advisor Funds,
Inc. (the "Feeder") (1940 Act file No. 811-8085), as filed with the Securities
and Exchange Commission (the "Commission") on June 4, 1997, and as amended from
time to time, (the "Feeder's Registration Statement"). Part A of the Feeder's
Registration Statement (the "Feeder's Part A") includes the joint prospectus of
the series of the Feeder which invest in the Portfolios (as defined below) and
those series of the Feeder which do not.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
GENERAL
AMERICAN SKANDIA MASTER TRUST (the "Master Trust") is an open-end,
management investment company, organized on March 6, 1997 as a business trust
under the laws of the State of Delaware. The Master Trust is a "series fund,"
which is a mutual fund divided into separate portfolios. By this offering
document, the Master Trust is offering five diversified portfolios (each a
"Portfolio," and together the "Portfolios"). As described below, for certain
matters the Master Trust interestholders vote together as a group; as to others
they vote separately by series. From time to time, other series may be
established and sold pursuant to other offering documents.
American Skandia Investment Services, Incorporated ("ASISI") serves as
the Master Trust's investment adviser. Currently, ASISI engages a sub-advisor
("Sub-Advisor") for the investment management of each Portfolio. The following
table highlights certain features of each Portfolio:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Portfolio: Sub-Advisor: Investment Goal: Investment Style:
ASMT T. Rowe Price International Equity Rowe Price-Fleming Total return on Invests primarily in
Portfolio International, Inc. assets from long- common stocks of
term growth of established foreign
capital and income companies which
have the potential
for growth of capital
or income or both
ASMT Janus Capital Growth Portfolio Janus Capital Capital growth Invests primarily in
Corporation common stocks
ASMT INVESCO Equity Income Portfolio INVESCO Trust High current income Invests in securities
Company and, secondarily, which will provide a
capital growth relatively high yield
and stable return and
which, over a period
of years, may also
provide capital
appreciation
ASMT PIMCO Total Return Bond Pacific Investment Maximize total Invests in fixed-
Portfolio Management return, consistent income securities of
Company with preservation of varying maturities
capital with an expected
average portfolio
duration from three
to six years
ASMT JPM Money Market Portfolio J.P. Morgan Maximize current Maintains a dollar-
Investment income and maintain weighted average
Management, Inc. high levels of portfolio maturity of
liquidity not more than 90
days and invest in
high quality U.S.
dollar-denominated
money market
instruments
</TABLE>
Beneficial interests in the Master Trust are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Regulation D under the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Master Trust may be made only by investment companies
or certain other entities which are "accredited investors" within the meaning of
Regulation D under the 1933 Act. This registration statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
Information on the Portfolios' investment objectives, the kinds of
securities in which the Portfolios' principally invest, other investment
practices of the Portfolios and risk factors associated with investments in the
Portfolios is incorporated herein by reference from the section entitled
"Investment Programs of the Funds" in the Feeder's Part A. A description of
certain securities and investment methods that the Portfolios may invest in or
use, and certain of the risks associated with such securities and investment
methods, is incorporated herein by reference from the sections entitled "Certain
Risk Factors and Investment Methods" and "Portfolio Turnover" in the Feeder's
Part A. Additional investment techniques, features and limitations concerning
the Portfolios' investment programs are described in Part B of this Registration
Statement.
ITEM 5. MANAGEMENT OF THE MASTER TRUST.
A description of how the business of the Master Trust is managed is
incorporated by reference from the sections entitled "Management of the Funds,"
"Other Information" and "Portfolio Transactions" in the Feeder's Part A. The
following list identifies the specific sections and subsections of the Feeder's
Part A under which the information required by Item 5 of Form N-1A may be found.
Each listed section is incorporated herein by reference.
Incorporated by Reference from the
Form N-1A Item No. following Section of Feeder's Part A
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Item 5(a) MANAGEMENT OF THE FUNDS - THE
DIRECTORS, TRUSTEES AND OFFICERS
Item 5(b) MANAGEMENT OF THE FUNDS - THE
INVESTMENT MANAGER; FEES AND EXPENSES
Item 5(c) MANAGEMENT OF THE FUNDS - THE SUB-
ADVISORS
Item 5(d) MANAGEMENT OF THE FUNDS - THE
ADMINISTRATOR
Item 5(f) MANAGEMENT OF THE FUNDS - FEES AND
EXPENSES
Item 5(g) PORTFOLIO TRANSACTIONS - BROKERAGE
ALLOCATION
PFPC International (Cayman) Ltd., located at Ugland House, P.O.
Box 309, South Church Street, George Town, Grand Cayman, Cayman Islands, BWI,
serves as the transfer agent for the Master Trust.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
The Master Trust is organized as a trust under the laws of the
State of Delaware. Investors in a series of the Master Trust will each be liable
for all obligations of such series. However, the risk of an investor incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Master Trust itself was unable to meet
its obligations.
All consideration received by the Master Trust for interests of
one of the series and all assets in which such consideration is invested will
belong to that series (subject only to the rights of creditors of the Master
Trust) and will be subject to the liabilities related thereto. The income
attributable to, and the expenses of, one series are treated separately from
those of any other series. The Master Trust has the ability to create, from time
to time, new series without interestholder approval.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other
agency. The net asset value of funds of this type will fluctuate.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Master Trust to hold annual meetings of interestholders. As
a result, interestholders may not consider each year the election of Trustees or
the appointment of auditors. However, the holders of at least 10% of the
interests outstanding and entitled to vote may require the Master Trust to hold
a special meeting of interestholders for purposes of removing a Trustee from
office. Master Trust interestholders may remove a Trustee by the affirmative
vote of a majority of the Master Trust's outstanding voting interests. In
addition, the Board of Trustees will call a meeting of interestholders for the
purpose of electing Trustees if, at any time, less than a majority of the
Trustees then holding office have been elected by interestholders. Investments
in the Master Trust may not be transferred, but an investor may withdraw all or
any portion of its investment at any time at net asset value.
Under the Master Trust's anticipated method of operation as a
partnership for federal income tax purposes, the Master Trust will not be
subject to any income tax. However, each investor in the Master Trust will be
taxable on its share (as determined in accordance with the governing instruments
of the Master Trust) of the Master Trust's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Code and regulations promulgated thereunder.
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Interestholder inquiries may be made by writing to the Master
Trust at Ugland House, P.O. Box 309, South Church Street, George Town, Grand
Cayman, Cayman Islands, BWI, or by calling (345) 949-6415.
ITEM 7. PURCHASE OF SECURITIES.
Beneficial interests in the Master Trust are issued solely in
private placement transactions which do not involve any "public offering" within
the meaning of Section 4(2) of the 1933 Act. Investments in the Master Trust may
be made only by investment companies or certain other entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
Interests in each Portfolio of the Master Trust are sold on a
continuous basis at the net asset value per interest of that Portfolio next
determined after an order in proper form is received by the PFPC International
(Cayman) Ltd. Net asset value per interest is determined as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time), on each business day. Net asset value per interest of a Portfolio is
computed by dividing the value of the Portfolio's net assets (i.e., the value of
its assets less liabilities) by the total number of its interests outstanding.
The investments of a Portfolio are valued based on market value or, where market
quotations are not readily available, based on fair value as determined in good
faith by, or in accordance with procedures established by, the Board of
Trustees. For further information regarding the methods employed in valuing the
investments of each Portfolio, see Item 19, "Purchase, Redemption and Pricing of
Securities," in Part B.
ITEM 8. REDEMPTION OR REPURCHASE.
An investor in the Master Trust may withdraw all or any portion
of its investment on any business day at the net asset value next determined
after a withdrawal request in proper form is furnished by the investor to the
Transfer Agent. When a request is received in proper form, the Master Trust will
redeem the interests at the next determined net asset value.
The Master Trust will make payment for all interests redeemed
within five days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Commission. Investments in
the Master Trust may not be transferred.
The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted, or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
ITEM 9. PENDING LEGAL PROCEEDINGS.
Not applicable.
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AMERICAN SKANDIA MASTER TRUST
PART B
June 4, 1997
ITEM 10. COVER PAGE.
This Part B, which is not a prospectus, supplements and should be read in
conjunction with the current Part A of American Skandia Master Trust (the
"Master Trust"), dated June 4, 1997, as it may be revised from time to time. To
obtain a copy of Part A of the Master Trust, please write to the Master Trust at
Ugland House, P.O. Box 309, South Church Street, George Town, Grand Cayman,
Cayman Islands, BWI, or call (345) 949-6415.
Responses to certain Items required to be included in Part B of
this Registration Statement are incorporated herein by reference from the
Feeder's Registration Statement. Part B of the Feeder's Registration Statement
(the "Feeder's Part B") includes the joint statement of additional information
of those series of the Feeder which invest in the Portfolios and those series of
the Feeder which do not.
<TABLE>
<CAPTION>
ITEM 11. TABLE OF CONTENTS.
Page
<S> <C>
General Information and History.......................................................................................B-1
Investment Objective and Policies.....................................................................................B-1
Management of the Master Trust........................................................................................B-2
Control Persons and Principal Holders of Securities...................................................................B-3
Investment Advisory and Other Services................................................................................B-4
Brokerage Allocation and Other Practices..............................................................................B-4
Capital Stock and Other Securities....................................................................................B-5
Purchase, Redemption and Pricing of Securities........................................................................B-6
Tax Status............................................................................................................B-7
Underwriters..........................................................................................................B-7
Calculations of Performance Data..................................................................................... B-7
Financial Statement...................................................................................................B-7
Report of Independent Auditors........................................................................................B-
</TABLE>
ITEM 12. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 13. INVESTMENT OBJECTIVE AND POLICIES.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH ITEM 4 IN PART A.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolios, the types
of securities bought and investment techniques used by the Portfolios, and
certain risks attendant thereto, as well as other information on the Portfolios'
investment programs, is incorporated herein by reference from the sections
entitled "Investment Programs of the Funds," "Fundamental Investment
Restrictions," "Certain Risk Factors and Investment Methods" and "Portfolio
Turnover" in the Feeder's Part B.
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ITEM 14. MANAGEMENT OF THE MASTER TRUST.
Trustees and officers of the Master Trust, together with
information as to their principal business occupations during at least the last
five years, are shown below. Each Trustee who is an "interested person" of the
Master Trust, as defined in the 1940 Act, is indicated by an asterisk.
<TABLE>
<CAPTION>
<S> <C> <C>
Name, Age and Address (1) Position Held with the Master Trust (2) Principal Occupation (3)
- --------------------- ----------------------------------- --------------------
Thomas M. Mazzaferro (44)* President, Principal Executive Officer Executive Vice President & Chief
and Trustee Financial Officer: American Skandia Life
Assurance Corporation
Gordon C. Boronow (44)* Vice President & Trustee President & Chief Operating Officer:
American Skandia Life Assurance
Corporation
Jan R. Carendi (52)* Trustee Senior Executive Vice President &
Member of Corporate Management
Group: Skandia Insurance Company Ltd.
Julian A. Lerner (72) Trustee Semi-retired since 1995; Senior Vice
12850 Spurling Road President & Portfolio Manager of AIM
Suite 308 Charter Fund and AIM Summit Fund
Dallas, TX 75230 from 1986 to 1995
F. Don Schwartz (61) Trustee Management Consultant since 1985
1101 Penn Grant Road
Lancaster, PA 17602
David E.A. Carson (62) Trustee President, Chairman &
People's Bank Chief Executive Officer:
850 Main Street People's Bank
Bridgeport, CT 06604
Thomas M. O'Brien (46) Trustee Vice Chairman: North Fork Bank since
North Fork Bank January 1997
275 Broad Hollow Road
Melville, N.Y. 11747 President & Chief Executive Officer:
North Side Savings Bank from December
1984 to December 1996
Management Consultant since April 1985
Gunnar Moberg (42) Vice President Director of Marketing: Skandia
Assurance and Financial Services
Jaime Francisco Paredes (42) Vice President President: Skandia Holding de Colombia
S.A.
C. Ake Svensson (46) Treasurer Treasurer: American Skandia Investment
Holding Corporation
Eric C. Freed (34) Secretary Securities Counsel: American Skandia
Investment Holding Corporation, since
December 1996
Attorney, Senior Attorney and Special
Counsel: U.S. Securities and Exchange
Commission from March 1991 to
November 1996
Richard G. Davy, Jr. (48) Controller Vice President, Operations: American
Skandia Investment Services,
Incorporated since January 1997
Controller: American Skandia Investment
Services, Incorporated from September
1994 to January 1997
Self-employed Consultant from December
1991 to September 1994
J. Fergus McKeon (37) Assistant Controller and Assistant General Manager: PFPC International
PFPC International (Dublin) Ltd. Corporate Secretary (Dublin) Ltd. since August 1993
80 Harcourt Street
Dublin 2, Ireland Financial Consultant from 1992 to 1993
</TABLE>
* Indicates a Trustee who is an "interested person" within the meaning set forth
in the 1940 Act.
(1) Unless otherwise indicated, the address of each officer and Trustee listed
above is One Corporate Drive, Shelton, Connecticut 06484.
(2) All of the officers and Trustees of the Master Trust listed above serve in
similar capacities for the American Skandia Advisor Funds, Inc. and/or American
Skandia Trust, both of which are other investment companies managed by the
Investment Manager.
(3) Unless otherwise indicated, each officer and Trustee listed above has held
his/her principal occupation for at least the last five years. In addition to
the principal occupations noted above, the following officers and Trustees of
the Master Trust hold various positions with either American Skandia Life
Assurance Corporation ("ASLAC"), American Skandia Investment Services,
Incorporated ("ASISI"), American Skandia Marketing, Incorporated ("ASM"),
American Skandia Information Services and Technology Corporation ("ASIST") or
American Skandia Investment Holding Corporation ("ASIHC"): Mr. Boronow also
serves as Executive Vice President, Chief Operating Officer and a Director of
ASIHC, and a Director of ASLAC, ASISI, ASM and ASIST; Mr. Carendi also serves as
Chairman, President, Chief Executive Officer and a Director of ASIHC, and Chief
Executive Officer and a Director of ASLAC, ASISI, ASM and ASIST; Mr. Davy also
serves as a Director of ASISI; Mr. Mazzaferro also serves as Executive Vice
President, Chief Financial Officer and a Director of ASIHC, a Director of ASLAC,
President, Chief Financial Officer and a Director of ASISI, and Executive Vice
President and Chief Financial Officer of ASM and ASIST.
The Declaration of Trust provides that the Trustees, officers and
employees of the Master Trust may be indemnified by the Master Trust to the
fullest extent permitted by Delaware law and the federal securities laws. The
Master Trust's By-laws provide that the Master Trust shall indemnify each of its
Trustees, officers and employees against liabilities and expenses reasonably
incurred by them, in connection with, or resulting from, any claim, action, suit
or
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proceeding, threatened against or otherwise involving such Trustee, officer or
employee, directly or indirectly, by reason of being or having been a Trustee,
officer or employee of the Master Trust. Neither the Declaration of Trust nor
the Bylaws of the Master Trust authorize the Master Trust to indemnify any
Trustee or officer against any liability to which he or she would otherwise be
subject by reason of or for willful misfeasance, bad faith, gross negligence or
reckless disregard of such person's duties.
The officers and Trustees of the Master Trust who are "interested
persons" within the meaning of the 1940 Act do not receive compensation directly
from the Master Trust for serving in the capacities described above. Those
officers and Trustees of the Master Trust, however, who are affiliated with the
Investment Manager may receive remuneration indirectly from the Master Trust for
services provided in their respective capacities with the Investment Manager.
Each of the non-interested Trustees is expected to receive for
his service on the Board of Trustees an annual and "per-meeting" fee, plus
reimbursement for reasonable out-of-pocket expenses incurred in connection with
attendance at Board meetings. The following table sets forth information
concerning the compensation anticipated to be paid by the Master Trust to the
Trustees in the current fiscal year. Neither the Master Trust nor any investment
company in Fund Complex offers any pension or retirement benefits to its
trustees.
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation from the
Name of Trustee: from the Master Trust: (1) Master Trust and Fund Complex: (2)
<S> <C> <C>
Gordon C. Boronow $0 $0
Jan R. Carendi $0 $0
David E.A. Carson $5,833 $39,500
Julian A. Lerner $5,833 $7,500
Thomas M. Mazzaferro $0 $0
Thomas M. O'Brien $5,833 $39,500
F. Don Schwartz $5,833 $39,500
</TABLE>
(1) Because the Master Trust commenced operations in June, 1997, no
compensation has been paid to the Trustees of the Master Trust as of June 1,
1997. The amount indicated estimates the compensation anticipated to be paid to
the Trustees of the Master Trust for the remaining period of the Master Trust's
fiscal year ending October 31, 1997.
(2) As of the date of this SAI, the "Fund Complex" consisted of the Master
Trust, the Feeder and American Skandia Trust. Because the Master Trust commenced
operations in June, 1997 and the Company commenced operations in July, 1997, the
amount indicated reflects the compensation paid to the Trustees, to the extent
applicable, solely for their service on the Board of Trustees of American
Skandia Trust for the year ending December 31, 1996. Note the Mr. Lerner was
appointed as a Trustee of American Skandia Trust in November 1996.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
No Trustee or officer of the Master Trust owned any of the Master
Trust's interests outstanding on June 1, 1997.
As of June 1, 1997, the following interestholders beneficially
owned, directly or indirectly, 5% or more of the Master Trust's outstanding
interests:
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<TABLE>
<CAPTION>
Name and Address Percent of Master Trust Interests Outstanding
<S> <C>
American Skandia Advisor Funds, Inc. 50%
Skandia Advisor Funds 50%
</TABLE>
At the present time, the Master Trust anticipates that its
interests will be held only by the American Skandia Advisor Funds, Inc., a
Maryland corporation, and Skandia Advisor Funds, a mutual fund company
incorporated under the law of Cayman Islands.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH ITEM 5 IN PART A.
Information on the investment management and other services
provided for or on behalf of the Portfolios is incorporated herein by reference
from the sections entitled "Investment Advisory & Administration Services,"
"Fund Expenses," "Distribution Arrangements" and "Other Information" in the
Feeder's Part B. The following list identifies the specific sections and
subsections in the Feeder's Part B under which the information required by Item
16 of Form N- 1A may be found. Each listed section is incorporated herein by
reference.
Incorporated by Reference from the
Form N-1A Item No. following Section of Feeder's Part B
Item 16(a) INVESTMENT ADVISORY & ADMINISTRATION
SERVICES - THE INVESTMENT MANAGER; THE
SUB-ADVISORS
Item 16(b) INVESTMENT ADVISORY & ADMINISTRATION
SERVICES - THE INVESTMENT MANAGER; THE
SUB-ADVISORS
Item 16(c) Not applicable
Item 16(d) INVESTMENT ADVISORY & ADMINISTRATION
SERVICES - THE ADMINISTRATOR
Item 16(e) Not applicable
Item 16(f) Not applicable
Item 16(g) Not applicable
Item 16(h) OTHER INFORMATION - DOMESTIC AND
FOREIGN CUSTODIANS
Item 16(i) Not applicable
Coopers & Lybrand, located at George Quay, P.O. Box 1283, Dublin
2, Ireland, has been selected as the independent certified public accounts of
the Master Trust, providing audit services and assistance and consultation with
respect to the preparation of filings with the Commission.
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ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
Information on portfolio turnover and brokerage allocation for or
on behalf of the Master Trust is incorporated herein by reference from the
sections entitled "Portfolio Turnover" and "Brokerage Allocation" in the
Feeder's Part B.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH ITEM 6 IN PART A.
Under the Declaration of Trust, the Trustees are authorized to
issue shares of beneficial interests in the Master Trust. Investors in each
Portfolio of the Master Trust are entitled to participate pro rata in
distributions of income, loss, gain and credit of that Portfolio. Upon
liquidation or dissolution of the Master Trust, investors in a Portfolio are
entitled to share pro rata in that Portfolio's net assets available for
distribution to its investors. Investments in the Master Trust have no
preference, pre-exemptive, conversion or similar rights and are fully paid and
non-assessable, except as set forth below. Investments in the Master Trust may
not be transferred. No certificates are issued.
Each investor is entitled to a vote, with respect to matters
effecting each of the Master Trust's series, in proportion to the amount of its
investment in the Master Trust. Investors in the Master Trust do not have
cumulative voting rights, and investors holding more than 50% of the aggregate
beneficial interest in the Master Trust may elect all of the Trustees of the
Master Trust if they choose to do so and in such event the other investors in
the Master Trust would not be able to elect any Trustee. The Master Trust is not
required to hold annual meetings of investors but the Master Trust will hold
special meetings of investors when in the judgment of the Master Trust's
Trustees it is necessary or desirable to submit matters for an investor vote.
The Trustees may elect to terminate the Trust or any Portfolio without a vote of
the interestholders.
Rule 18f-2 under the 1940 Act provides that any matter required
to be submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of an investment
company, such as the Master Trust, with more than one Portfolio will not be
deemed to have been effectively acted upon unless approved by the holders of a
majority of the outstanding interests of each Portfolio of the Master Trust
affected by such matter. Rule 18f-2 further provides that a Portfolio of the
Master Trust shall be deemed to be affected by a matter unless it is clear that
the interests of the Portfolio in the matter are identical or that the matter
does not affect any interest of the Portfolio. However, the Rule exempts the
selection of independent accountants and the election of Trustees from the
separate voting requirements of the Rule.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH ITEMS 7 AND 8 IN PART A.
PURCHASE OF SECURITIES. Beneficial interests in the Master Trust
are issued solely in private placement transactions which do not involve any
"public offering" within the meaning of Section 4(2) of the 1933 Act.
Investments in the Master Trust may only be made by investment companies or
certain other entities which are "accredited investors" within the meaning of
Regulation D under the 1933 Act. This registration statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
SUSPENSION OF REDEMPTIONS. The right of redemption of interests
of a Portfolio of the Master Trust may be suspended or the date of payment
postponed (a) during any period when the New York Stock Exchange is closed
(other than customary weekend and holiday closings), (b) when trading in the
markets the Portfolio ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so that
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disposal of the Portfolio's investments or determination of its net asset value
is not reasonably practicable, or (c) for such other periods as the Commission
by order may permit to protect the Master Trust's interestholders.
PRICING OF SECURITIES. Portfolio securities, including covered
call options written by the Master Trust, are valued at the last sale price on
the securities exchange or national securities market on which such securities
primarily are traded. Securities not listed on an exchange or national
securities market, or securities in which there were no transactions, are valued
at the average of the most recent bid and asked prices, except in the case of
open short positions where the asked price is used for valuation purposes. Bid
price is used when no asked price is available. Short-term investments are
carried at amortized cost, which approximates value. Any securities or other
assets for which recent market quotations are not readily available are valued
at fair value as determined in good faith by the Trustees. Expenses and fees,
including the management fee, are accrued daily and taken into account for the
purpose of determining the net asset value of interests in each Portfolio of the
Master Trust.
Restricted securities, as well as securities or other assets for
which market quotations are not readily available, or are not valued by a
pricing service approved by the Trustees, are valued at fair value as determined
in good faith by the Trustees. The Trustees will review the method of valuation
on a current basis. In making their good faith valuation of restricted
securities, the Trustees generally will take the following factors into
consideration: restricted securities which are, or are convertible into,
securities of the same class of securities for which a public market exists
usually will be valued at market value less the same percentage discount at
which purchased. This discount will be revised periodically by the Trustees if
the Trustees believe that it no longer reflects the value of the restricted
securities. Restricted securities not of the same class as securities for which
a public market exists usually will be valued initially at cost. Any subsequent
adjustment from cost will be based upon considerations deemed relevant by the
Trustees.
NEW YORK STOCK EXCHANGE CLOSINGS. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
ITEM 20. TAX STATUS.
The Master Trust is organized as a trust under Delaware law.
Management of the Master Trust believes that the Master Trust will qualify for
the fiscal year ended October 31, 1997 as a partnership for Federal income tax
purposes. As such, the Master Trust will not be subject to any income tax.
However, each investor in the Master Trust will be taxable on its share (as
determined in accordance with the governing instruments of the Master Trust) of
the Master Trust's ordinary income and capital gain in determining its income
tax liability. The determination of such share will be made in accordance with
the Internal Revenue Code of 1986, as amended (the "Code"), and regulations
promulgated thereunder.
The Master Trust's taxable year-end is October 31, 1997. Although
the Master Trust will not be subject to Federal income tax, it will file
appropriate Federal income tax returns.
It is intended that the Master Trust's assets, income and
distributions will be managed in such a way that an investor in the Master Trust
will be able to satisfy the requirements of Subchapter M of the Code for
qualification as a regulated investment company, assuming that the investor
invested all of its investable assets in the Master Trust.
Investors are advised to consult their own tax advisers as to the
tax consequences of an investment in the Master Trust.
ITEM 21. UNDERWRITERS.
The exclusive placement agent for the Master Trust is American
Skandia Marketing, Incorporated, which receives no compensation for serving in
this capacity.
NB135463.10
B-7
<PAGE>
ITEM 22. CALCULATIONS OF PERFORMANCE DATA.
Not applicable.
ITEM 23. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
AMERICAN SKANDIA MASTER TRUST
STATEMENTS OF ASSETS AND LIABILITIES
May 28, 1997
ASMT ASMT T. ASMT ASMT JPM ASMT PIMCO Total
Janus Rowe Price INVESCO Money Return Bond
Capital InternationalEquity Market
Growth Equity Income
-----------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C>
Cash $20,000 $20,000 $20,000 $20,000 $20,000
Deferred organization 19,628 19,628 19,628 19,629 19,629
expenses
----------------------- -------------------- ------------
Total assets 39,628 39,628 39,628 39,629 39,629
----------------------- -------------------- ------------
LIABILITIES
Organization expenses 19,628 19,628 19,628 19,629 19,629
payable to the
Investment Advisor
----------------------- -------------------- ------------
NET ASSETS $20,000 $20,000 $20,000 $20,000 $20,000
======================= ==================== ============
See notes to the financial statements.
</TABLE>
AMERICAN SKANDIA MASTER TRUST
NOTES TO STATEMENTS OF ASSETS AND LIABILITIES
May 28, 1997
1. ORGANIZATION
American Skandia Master Trust (the "Trust"), a Delaware Business Trust, is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company currently offering five
portfolios: ASMT Janus Capital Growth, ASMT T. Rowe Price International Equity,
ASMT INVESCO Equity Income, ASMT JPM Money Market, ASMT PIMCO Total Return Bond
(each a "Portfolio"). The Trust has not commenced operations except those
relating to organizational matters and the sale of beneficial interest in the
amount of $10,000 each to ASAF Janus Capital Growth, ASAF T. Rowe Price
International Equity, ASAF INVESCO Equity Income, ASAF JPM Money Market, ASAF
Total Return Bond (collectively "American Skandia Advisor Funds"), Skandia Janus
Capital Growth, Skandia T. Rowe Price International Equity, Skandia INVESCO
Equity Income, Skandia J.P. Morgan Money Market, and Skandia PIMCO Total Return
Bond (collectively "Skandia Advisor Funds").
2. SIGNIFICANT ACCOUNTING POLICIES
Organization expenses will be amortized on a straight line basis over a period
not to exceed five years from the date that operations commence. The above
mentioned Funds will reimburse their respective portfolios for any unamortized
organization expenses upon the withdrawal of any initial beneficial interest.
The amount to be reimbursed will be determined by the proportion of the amount
of initial beneficial interest withdrawn to the initial beneficial interest of
all holders after taking into account any prior withdrawals of such initial
beneficial interest.
The value of an investor's beneficial interest in the Portfolio is equal to the
product of the aggregate net asset value of the Portfolio and the percentage
representing that investor's share of the aggregate beneficial interest in the
Portfolio effective for that day.
3. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS
WITH AFFILIATES
The Trust has entered into a Management Agreement with American Skandia
Investment Services, Inc. ("ASISI") and an Administration and Accounting
Services Agreement with PFPC International Ltd. ("PFPC") under which PFPC
provides administration and accounting services to the Trust pursuant to the
Agreements.
NB135463.10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of American Skandia Master Trust:
We have audited the accompanying Statements of Assets and Liabilities of
American Skandia Master Trust (the "Trust") as of May 28, 1997. This financial
statement is the responsibility of the Trust's management. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of American Skandia Master Trust
as of May 28, 1997 in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand
Coopers & Lybrand
Dublin, Republic of Ireland
May 28, 1997
B-8
<PAGE>
AMERICAN SKANDIA MASTER TRUST
PART C. OTHER INFORMATION
<TABLE>
<CAPTION>
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<S> <C> <C> <C> <C> <C> <C>
(a) Financial Statements:
(1) Statement of Assets and Liabilities of the Portfolios as of May 28, 1997.
(2) Report of Coopers & Lybrand, Independent Auditors, dated May 28, 1997.
(b) Exhibits:
(1)(a) Certificate of Trust*
(1)(b) Agreement and Declaration of Trust*
(2) By-Laws *
(5)(a) Form of Investment Management Agreement between Registrant and American Skandia Investment
Services, Incorporated for ASMT T. Rowe Price International Equity Portfolio*
(5)(b) Form of Investment Management Agreement between Registrant and American Skandia Investment
Services, Incorporated for ASMT Janus Capital Growth Portfolio*
(5)(c) Form of Investment Management Agreement between Registrant and American Skandia Investment
Services, Incorporated for ASMT INVESCO Equity Income Portfolio*
(5)(d) Form of Investment Management Agreement between Registrant and American Skandia Investment
Services, Incorporated for ASMT PIMCO Total Return Bond Portfolio*
(5)(e) Form of Investment Management Agreement between Registrant and American Skandia Investment
Services, Incorporated for ASMT JPM Money Market Portfolio*
(5)(f) Form of Sub-advisory Agreement between American Skandia Investment Services, Incorporated and
Rowe Price-Flemming International, Inc. for ASMT T. Rowe Price International Equity Portfolio*
(5)(g) Form of Sub-advisory Agreement between American Skandia Investment Services, Incorporated and
Janus Capital Corporation for ASMT Janus Capital Growth Portfolio*
(5)(h) Form of Sub-advisory Agreement between American Skandia Investment Services, Incorporated and
INVESCO Trust Company for ASMT INVESCO Equity Income Portfolio*
(5)(i) Form of Sub-advisory Agreement between American Skandia Investment Services, Incorporated and
Pacific Investment Management Company for ASMT PIMCO Total Return Bond Portfolio*
(5)(j) Form of Sub-advisory Agreement between American Skandia Investment Services, Incorporated and
J.P. Morgan Investment Management, Inc. for ASMT JPM Money Market Portfolio*
(6) Placement Agency Agreement*
NB135463.10
C-1
<PAGE>
(8)(a) Form of Custody Agreement between Registrant and PNC Bank*
(8)(b) Form of Custody Agreement between Registrant and Morgan Stanley Trust Company*
(9) Administration Services Agreement*
(10) Opinion (including consent) of Rogers & Wells*
(11) Consent of Independent Auditors*
(13)(a) Form of Share Purchase Agreement between American Skandia Marketing, Incorporated and
American Skandia Advisor Funds, Inc.*
(13)(a) Form of Share Purchase Agreement between American Skandia Marketing, Incorporated and
Skandia Advisor Funds*
* Filed herewith.
</TABLE>
NB135463.10
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<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of beneficial interest of the following AS OF MAY 1, 1997
-----------------
portfolios:
ASMT T. Rowe Price International Equity Portfolio 0
ASMT Janus Capital Growth Portfolio 0
ASMT INVESCO Equity Income Portfolio 0
ASMT PIMCO Total Return Bond Portfolio 0
ASMT JPM Morgan Money Market Portfolio 0
ITEM 27. INDEMNIFICATION.
Reference is made to Article IX of the Registrant's Declaration
of Trust filed as Exhibit 1(b) hereto. The application of these provisions is
limited by Article 10 of the Registrant's By-Laws filed as Exhibit 2 hereto and
by the following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in such Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a trustee, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such Act
and will be governed by the final adjudication of such issue.
Reference also is made to the Placement Agency Agreement filed as
Exhibit 6.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See Item 5, "Management of the Master Trust" in Part A and Item
16, "Investment Advisory and Other Services" in Part B regarding the business of
the Investment Manager. For information as to the business, profession, vocation
or employment of a substantial nature engaged in by ASISI or any of its
respective officers and directors during the past two years, reference is made
to Form ADV, filed with the Securities and Exchange Commission under the
Investment Advisers Act of 1940 by ASISI, incorporated by reference herein (SEC
File No. 801-40532).
NB135463.10
C-3
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Not applicable.
(b) Set forth below is a list of each executive officer and
director of the Placement Agent. The principal business address of each such
person is One Corporate Drive, Shelton, Connecticut 06484.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
WITH THE PLACEMENT POSITIONS AND OFFICES
NAME AGENT WITH REGISTRANT
<S> <C> <C> <C>
Gordon C. Boronow Director Vice President & Director
Kimberely A. Bradshaw Vice President & National None
Accounts Manager
Jan R. Carendi Chief Executive Officer & President, Principal Executive
Director Officer & Director
Daniel R. Darst Senior Vice President & National None
Marketing Director
Paul DeSimone Vice President, Corporate None
Controller & Director
Wade A. Dokken President, Chief Marketing None
Officer & Director
Walter G. Kenyon Vice President & National None
Accounts Manager
Lawrence Kudlow Senior Vice President & Chief None
Economist
N. David Kuperstock Vice President & Director None
Daniel LaBonte Vice President & Associate None
Marketing Director
Thomas M. Mazzaferro Executive Vice President & Chief Treasurer & Director
Financial Officer
Kristen E. Newall Assistant Corporate Secretary None
Brian O'Connor Vice President & National Sales None
Manager (Internal Wholesaling)
M. Priscilla Pannell Corporate Secretary None
Don Thomas Peck Senior Vice President, National None
Sales Manager & Director
Hayward Sawyer Senior Vice President, National None
Sales Manager & Director
Christian Thwaites Vice President, Qualified Plans None
Bayard F. Tracy Senior Vice President, National None
Sales Manager & Director
</TABLE>
NB135463.10
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<PAGE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained
by Section 31(a) of the Investment Company Act of 1940, as amended, and the
Rules promulgated thereunder with respect to the Master Trust are maintained at
its offices at Ugland House, P.O. Box 309, South Church Street, George Town,
Grand Cayman, Cayman Islands, BWI.
ITEM 31. MANAGEMENT SERVICES.
Not Applicable.
ITEM 32. UNDERTAKINGS.
Registrant hereby undertakes to call a meeting of interestholders
for the purpose of voting upon the question of removal of a trustee or trustees
when requested in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest and in connection with
such meeting to comply with the provisions of Section 16(c) of the Investment
Company Act of 1940 relating to shareholder communications.
NB135463.10
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Dublin
and Country of Ireland, on the 29th day of May, 1997.
AMERICAN SKANDIA MASTER TRUST
(Registrant)
By: /s/ J. Fergus McKeon
J. Fergus McKeon
Assistant Controller and Assistant Corporate Secretary
NB135463.10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Number Description of Exhibit Numbered Page
(2) Exhibits
<S> <C> <C>
(1)(a) -- Certificate of Trust*.........................................................................
(1) (b) -- Agreement and Declaration of Trust*...........................................................
(2) -- By-Laws*......................................................................................
(5)(a) -- Form of Investment Management Agreement between Registrant and
American Skandia Investment Services, Incorporated for ASMT T.
Rowe Price International Equity Portfolio*....................................................
(5)(b) -- Form of Investment Management Agreement between Registrant and
American Skandia Investment Services, Incorporated for ASMT
Janus Capital Growth Portfolio*...............................................................
(5)(c) -- Form of Investment Management Agreement between Registrant and
American Skandia Investment Services, Incorporated for ASMT
INVESCO Equity Income Portfolio*..............................................................
(5)(d) -- Form of Investment Management Agreement between Registrant and
American Skandia Investment Services, Incorporated for ASMT
PIMCO Total Return Bond Portfolio*............................................................
(5)(e) -- Form of Investment Management Agreement between Registrant and
American Skandia Investment Services, Incorporated for ASMT
JPM Money Market Portfolio*...................................................................
(5)(f) -- Form of Sub-advisory Agreement between American Skandia Investment
Services, Incorporated and Rowe Price-Flemming International,
Inc. for ASMT T. Rowe Price International Equity Portfolio*...................................
(5)(g) -- Form of Sub-advisory Agreement between American Skandia Investment
Services, Incorporated and Janus Capital Corporation for ASMT
Janus Capital Growth Portfolio*...............................................................
(5)(h) -- Form of Sub-advisory Agreement between American Skandia Investment
Services, Incorporated and INVESCO Trust Company for ASMT
INVESCO Equity Income Portfolio*..............................................................
(5)(i) -- Form of Sub-advisory Agreement between American Skandia Investment
Services, Incorporated and Pacific Investment Management
Company for ASMT PIMCO Total Return Bond Portfolio*...........................................
(5)(j) -- Form of Sub-advisory Agreement between American Skandia Investment
Services, Incorporated and J.P. Morgan Investment Management, Inc.
for ASMT JPM Money Market Portfolio*..........................................................
(6) -- Form of Placement Agency Agreement*...........................................................
(8)(a) -- Form of Custody Agreement between Registrant and PNC Bank*....................................
(8)(b) -- Form of Custody Arrangement between Registrant and Morgan Stanley
Trust Company*................................................................................
(9) -- Form of Administration Services Agreement*....................................................
(10) -- Opinion and Consent of Rogers & Wells*........................................................
(11) -- Consent of Independent Auditors*..............................................................
(13)(a) -- Form of Share Purchase Agreement between American Skandia Marketing,
Incorporated and American Skandia Advisor Funds, Inc.*........................................
(13)(b) -- Form of Share Purchase Agreement between American Skandia Marketing,
Incorporated and Skandia Advisor Funds*.......................................................
</TABLE>
* Filed herewith.
CERTIFICATE OF TRUST OF
AMERICAN SKANDIA MASTER TRUST
THIS Certificate of Trust of American Skandia Master Trust
(the "Trust"), dated March 5, 1997, is being duly executed and
filed by the undersigned, as trustees, to form a business trust
under the Delaware Business Trust Act (12 Del. C. ss.. 3801, et
seq.).
1. Name. The name of the business trust formed hereby is
American Skandia Master Trust.
2. Registered Agent. The business address of the registered
office of the Trust in the State of Delaware is 1209 Orange Street,
Wilmington, Delaware 19801. The name of the Trust's registered
agent at such address is The Corporation Trust Company.
3. Effective Date. This Certificate of Trust shall be
effective upon the date and time of filing.
4. Series Trust. Notice is hereby given that, pursuant to Section 3804
of the Delaware Business Trust Act, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series of the Trust shall be enforceable against the assets of such
series only and not against the assets of the Trust generally. The Trust will be
a registered investment company under the Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, each of the undersigned trustees of the Trust, have
executed this Certificate of Trust as of the date first above-written.
/s/ Gordon C. Boronow
Gordon C. Boronow
Trustee
/s/ Thomas M. Mazzaferro
Thomas M. Mazzaferro
Trustee
/s/Jan R. Carendi
Jan R. Carendi
Trustee
AMERICAN SKANDIA MASTER TRUST
AGREEMENT AND DECLARATION OF TRUST
THIS AGREEMENT AND DECLARATION OF TRUST, made this 5th day of March,
1997, by the Trustees hereunder (hereinafter with any additional and successor
trustees referred to as the "Trustees") and by the holders of Interests to be
issued hereunder as hereinafter provided.
W I T N E S S E T H:
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Delaware business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Interests, whether or not certificated, in this Trust as hereinafter
set forth.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as American
Skandia Master Trust and the Trustees shall conduct the business of
the Trust under that name or any other name as they may from time
to time determine
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The term "Commission" shall have the meaning provided in
the 1940 Act;
(b) The "Trust" refers to the Delaware business trust established by
this Declaration of Trust, as amended from time to time;
(c) The term "Interestholder" shall mean a record owner of
Interests of the Trust;
(d) The term "Interests" shall mean the equal proportionate
non-transferable units of interest into which the beneficial interest in the
Trust shall be divided from time to time or, if more than one series or class of
Interests is authorized by the Trustees, the equal proportionate
non-transferable units into which each series or class of Interests shall be
divided from time to
NB128986.2
<PAGE>
time, and includes a fraction of an Interest as well as a whole
Interest;
(e) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The term "Manager" is defined in Article IV, Section 5;
(g) The term "Person" shall mean an individual or any
corporation, partnership, joint venture, trust or other enterprise;
(h) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;
(i) "Bylaws" shall mean the Bylaws of the Trust as amended
from time to time;
(j) The term "series" or "series of Interests" refers to the one or
more separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Interests of the Trust
representing the beneficial interest of Interestholders in such respective
portfolios;
(k) The term "class" or "class of Interests" refers to the division of
Interests representing any series into two or more classes as provided in
Article III, Section 1 hereof;
(l) The term "Delaware Act" shall mean the Delaware Business
Trust Act, 12 Del. C. ss.ss. 3801, et seq.; and
(m) The term "Bankruptcy" shall mean, with respect to any
Interestholder, any of the following:
(i) filing a voluntary petition in bankruptcy or for
reorganization or for the adoption of an arrangement under the
Bankruptcy Code (as now or in the future amended) or an admission
seeking the relief therein provided;
(ii) making a general assignment for the benefit of creditors;
(iii) consenting to the appointment of a receiver for all or a
substantial part of such Interestholder's property;
(iv) in the case of the filing of an involuntary petition in
bankruptcy, an entry of an order for relief;
(v) the entry of a court order appointing a receiver or
trustee for all or a substantial part of such Interestholder's
property without its consent; or
NB128986.2
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<PAGE>
(vi) the assumption of custody or sequestration by a court of
competent jurisdiction of all or substantially all of such
Interestholder's property.
(n) The term "Adjusted Basis" shall mean, with respect to any Security,
its adjusted basis for federal income tax purposes.
(o) The term "Adjusted Gross Asset Value" shall mean, with respect to a
Built-in Gain Security, the lesser of (i) the Gross Asset Value of such Security
on the day such Security is contributed to the Trust and (ii) the lowest Gross
Asset Value of such Security on any day thereafter, and, with respect to a
Built- in Loss Security, the higher of (i) the Gross Asset Value of such
Security on the day such Security is contributed to the Trust and (ii) the
highest Gross Asset Value of such Security on any day thereafter.
(p) The term "Appreciated Security" shall mean any Security held by the
Trust immediately before but on the same day as a new Interestholder is admitted
to the Trust if on such day the Gross Asset Value of such Security exceeds its
Adjusted Basis or if such Security is a Built-in Gain Security its Adjusted
Gross Asset Value.
(q) The term "Book Capital Account" shall mean, with respect to any
Interestholder, the Capital Account maintained for such Interestholder on a
daily basis in accordance with the following provisions:
(i) To each Interestholder's Book Capital Account there shall
be credited (a) the amount of money and the Gross Asset Value of
any property contributed by such Interestholder to the Trust, (b)
such Interestholder's distributive share of Net Income, (c) such
Interestholder's distributive share of Book Sales Gain, and (d)
the amount of any Trust liabilities assumed by such
Interestholder or which are secured by any property distributed
to such Interestholder.
(ii) To each Interestholder's Book Capital Account there shall
be debited (a) the amount of money and the Gross Asset Value of
any property distributed to such Interestholder pursuant to any
provision of this Agreement, (b) such Interestholder's
distributive share of Net Loss, (c) such Interestholder's
distributive share of Book Sales Loss, and (d) the amount of any
liabilities of such Interestholder assumed by the Trust or which
are secured by any property contributed by such Interestholder to
the Trust.
Any decisions relating to the maintenance of Book Capital Accounts
shall be made by the Trustees in any manner that reasonably reflects the purpose
and intention of this Agreement. In the event the Trustees shall determine that
it is prudent to
NB128986.2
3
<PAGE>
modify the manner in which the Book Capital Accounts, or any debits or credits
thereto, are computed in order to reflect the purpose and intention of this
Agreement, the Trustee may make such modification.
(r) The terms "Book Sales Gain" or "Book Sales Loss" shall mean, for
any day, the difference, positive or negative, as the case may be, between (x)
the aggregate Gross Asset Value of all Securities held by the Trust at any time
during such day other than Securities acquired by the Trust on such day and (y)
the aggregate Gross Asset Value of all such Securities as determined for the
preceding day.
(s) The term "Built-in Gain Security" shall mean any Security
contributed by an Interestholder to the Trust if on the day such Security is
contributed to the Trust, its Gross Asset Value exceeds its Adjusted Basis.
(t) The term "Built-in Loss Security" shall mean any Security
contributed by an Interestholder to the Trust if on the day such Security is
contributed to the Trust, its Gross Asset Value is less than its Adjusted Basis.
(u) The term "Code", shall mean the Internal Revenue Code of 1986, as
amended from time to time (or any corresponding provisions of succeeding law).
(v) The term "Depreciated Security" shall mean any Security held by the
Trust immediately before but on the same day as a new Interestholder is admitted
to the Trust if on such day such Security's Gross Asset Value is less than its
Adjusted Basis or if such Security is a Built-in Loss Security its Adjusted
Gross Asset Value.
(w) The term "Gross Asset Value" shall mean, with respect to any
Security, the value of such Security determined as follows:
Securities are valued at the last sale price on the securities exchange
on which such securities are primarily traded or at the last sale price
on the national securities market. Securities not listed on an exchange
or national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and
asked prices, except in the case of open short positions where the
asked price is used for valuation purposes. Short-term investments are
carried at amortized cost, which approximates value. Bid price is used
when no asked price is available. Market quotations for foreign
securities in foreign currencies are translated into U.S. dollars at
the prevailing rates of exchange. Any securities or other assets for
which recent market quotations are not readily available are valued at
fair market as determined in good faith by the Trustees. Securities
sold are valued for the day of sale at their net sales price.
NB128986.2
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<PAGE>
(x) The term "Modified Gross Asset Value" shall mean, with respect to
an Appreciated Security, the lesser of (i) the Gross Asset Value of such
Security on the day such Security became an Appreciated Security and (ii) the
lowest Gross Asset Value of such Security on any day thereafter, and, with
respect to a Depreciated Security, the higher of (i) the Gross Asset Value of
such Security on the day such Security became a Depreciated Security and (ii)
the highest Gross Asset Value of such Security on any day thereafter.
(y) The terms "Net Income" or "Net Loss" shall mean, for any day, the
sum, if positive, or if negative, as the case may be, of all items of income,
gain, deduction and loss (other than items included in computing Tax Sales Gain,
Tax Sales Loss, Remaining Built-in Gain, Remaining Built-in Loss, Remaining
Appreciated Gain or Remaining Depreciated Loss) recognized by the Trust on such
day for federal income tax purposes and determined in accordance with the
provisions of this Agreement.
(z) The term "Percentage Interest" shall mean, with respect to any
Interestholder, as of any day, the ratio (expressed as a percentage) of such
Interestholder's Book Capital Account as of the close of business on the
preceding day to the aggregate Book Capital Accounts of all Interestholders as
of the close of business on such preceding day, such Book Capital Accounts to be
determined after giving effect to all contributions, distributions, and
allocations through such preceding day.
(aa) The term "Positive Book/Tax Disparity" shall mean, with respect to
any Interestholder, the excess (if any) of such Interestholder's Book Capital
Account over the sum of such Interestholder's (i) Tax Capital Account, (ii)
Remaining Built-in Gain with respect to each Built-in Gain Security contributed
by such Interestholder to the Trust and (iii) share of Remaining Appreciated
Gain.
(bb) The term "Positive Tax/Book Disparity" shall mean, with respect to
any Interestholder, the excess (if any) of such Interestholder's Tax Capital
Account over the sum of such Interestholder's (i) Book Capital Account, (ii)
Remaining Built-in Loss with respect to each Built-in Loss Security contributed
by such Interestholder to the Trust and (iii) share of Remaining Depreciated
Gain.
(cc) The term "Regulations" shall mean the Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
(dd) The term "Remaining Appreciated Gain" shall mean, with respect to
each Appreciated Security, the excess (if any) of such Security's Modified Gross
Asset Value over such Security's Adjusted Basis, or if such Security is a
Built-in Gain Security its Adjusted Gross Asset Value, on the day such Security
became an Appreciated
Security.
NB128986.2
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(ee) The term "Remaining Built-in Gain" shall mean, with respect to
each Built-in Gain Security, the excess (if any) of such Security's Adjusted
Gross Asset Value over such Security's Adjusted Basis on the day such Security
is contributed to the Trust.
(ff) The term "Remaining Built-in Loss" shall mean, with respect to
each Built-in Loss Security, the excess (if any) of such Security's Adjusted
Basis on the day such Security is contributed to the Trust over such Security's
Adjusted Gross Asset Value.
(gg) The term "Remaining Depreciated Loss" shall mean, with respect to
each Depreciated Security, the excess (if any) of such Security's Adjusted
Basis, or if such Security is a Built-in Loss Security its Adjusted Gross Asset
Value, on the day such Security became a Depreciated Security over such
Security's Modified Gross Asset Value.
(hh) The term "Tax Capital Account" shall mean, with respect to any
Interestholder, the Capital Account maintained for such Interestholder on a
daily basis in accordance with the following provisions:
(i) To each Interestholder's Tax Capital Account there shall
be credited (a) the amount of money and the Adjusted Basis of any
property contributed by such Interestholder to the Trust, (b)
such Interestholder's distributive share of Net Income, (c) such
Interestholder's distributive share of Tax Sales Gain, and (d)
the amount of any Trust liabilities assumed by such
Interestholder or which are secured by any property distributed
to such Interestholder.
(ii) To each Interestholder's Tax Capital Account there shall
be debited (a) the amount of money and the Gross Asset Value of
any property distributed to such Interestholder pursuant to any
provision of this Agreement, (b) such Interestholder's
distributive share of Net Loss, (c) such Interestholder's
distributive share of Tax Sales Loss, and (d) the amount of any
liabilities of such Interestholder assumed by the Trust or which
are secured by any property contributed by such Interestholder to
the Trust.
Any decisions relating to the maintenance of Tax Capital Accounts shall
be made by the Trustees in any manner that reasonably reflects the purpose and
intention of this Agreement. In the event the Trustees shall determine that it
is prudent to modify the manner in which the Tax Capital Accounts, or any debits
or credits thereto, are computed in order to reflect the purpose and intention
of this Agreement, the Trustee may make such modification.
(ii) The terms "Tax Sales Gain" or "Tax Sales Loss" shall mean, for any
day, the sum, if positive, or if negative, as the
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case may be, of all items of gain or loss recognized by the Trust on such day
for federal income tax purposes from the sale or other disposition of Securities
(other than items of gain or loss included in Remaining Built-in Gain, Remaining
Built-in Loss, Remaining Appreciated Gain or Remaining Depreciated Loss with
respect to such Securities).
ARTICLE II
PURPOSES OF TRUST
This Trust is formed for the following purpose or purposes:
(a) to conduct, operate and carry on the business of an
investment company;
(b) to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, lend, write options on, exchange,
distribute or otherwise dispose of and deal in and with securities of every
nature, kind, character, type and form, including, without limitation of the
generality of the foregoing, all types of stocks, shares, futures contracts,
bonds, debentures, notes, bills and other negotiable or non-negotiable
instruments, obligations, evidences of interest, certificates of interest,
certificates of participation, certificates, interests, evidences of ownership,
guarantees, warrants, options or evidences of indebtedness issued or created by
or guaranteed as to principal and interest by any state or local government or
any agency or instrumentality thereof, by the United States Government or any
agency, instrumentality, territory, district or possession thereof, by any
foreign government or any agency, instrumentality, territory, district or
possession thereof, by any corporation organized under the laws of any state,
the United States or any territory or possession thereof or under the laws of
any foreign country, bank certificates of deposit, bank time deposits, bankers'
acceptances and commercial paper; to pay for the same in cash or by the issue of
stock, including treasury stock, bonds or notes of the Trust or otherwise; and
to exercise any and all rights, powers and privileges of ownership or interest
in respect of any and all such investments of every kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more persons, firms,
associations or corporations to exercise any of said rights, powers and
privileges in respect of any said instruments;
(c) to borrow money or otherwise obtain credit and to secure the same
by mortgaging, pledging or otherwise subjecting as security the assets of the
Trust;
(d) to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, and otherwise deal in, Interests including
Interests in fractional denominations, and to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Interests any funds or
other assets of the appropriate series or class of Interests, whether capital or
NB128986.2
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surplus or otherwise, to the full extent now or hereafter permitted
by the laws of the State of Delaware;
(e) to conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within and
without the State of Delaware, in any and all States of the United States of
America, in the District of Columbia, and in any other parts of the world; and
(f) to do all and everything necessary, suitable, convenient, or proper
for the conduct, promotion, and attainment of any of the businesses and purposes
herein specified or which at any time may be incidental thereto or may appear
conducive to or expedient for the accomplishment of any of such businesses and
purposes and which might be engaged in or carried on by a Trust organized under
the Delaware Act, and to have and exercise all of the powers conferred by the
laws of the State of Delaware upon a Delaware business trust.
The foregoing provisions of this Article II shall be construed both as
purposes and powers and each as an independent purpose and power.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Interests. The Interests of the Trust are non-transferable
and shall be issued in one or more series as the Trustees may, without
Interestholder approval, authorize. Each series shall be separate from all other
series in respect of the assets and liabilities allocated to that series and
shall represent a separate investment portfolio of the Trust. The beneficial
interest in each series at all times shall be divided into Interests, with or
without par value as the Trustees may from time to time determine, each of which
shall, except as provided in the following sentence, represent an equal
proportionate interest in the series with each other Interest of the same
series, none having priority or preference over another. The Trustees may,
without Interestholder approval, divide Interests of any series into two or more
classes, Interests of each such class having such preferences and special or
relative rights and privileges (including without limitation, such redemption
rights, dividend rights, liquidation rights, voting rights and conversion
rights, if any) as the Trustees may determine. The number of Interests
authorized shall be unlimited, and the Interests so authorized may be
represented in part by fractional Interests. From time to time, the Trustees may
divide or combine the Interests of any series or class into a greater or lesser
number without thereby changing the proportionate beneficial interests in the
series or class.
All consideration received by the Trust for the issue or sale of Interests
of a particular series, together with all assets in which such consideration is
invested or reinvested, all income,
NB128986.2
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earnings, profits, and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, shall
be held and accounted for separately from the other assets of the Trust and of
every other series and may be referred to herein as "assets of" that series. The
assets of a particular series shall belong to that series for all purposes, and
to no other series, subject only to the rights of creditors of that series. In
addition, any assets, income, earnings, profits or funds, or payments and
proceeds with respect thereto, which are not readily identifiable as belonging
to any particular series shall be allocated by the Trustees between and among
one or more of the series in such manner as the Trustees, in their sole
discretion, deem fair and equitable. Each such allocation shall be conclusive
and binding upon the Interestholders of all series for all purposes, and such
assets, income, earnings, profits or funds, or payments and proceeds with
respect thereto shall be assets of that series. The assets of a particular
series shall be so recorded upon the books of the Trust, and shall be held by
the Trustees in trust for the benefit of the holders of Interests of that
series. The assets of each particular series shall be charged with the
liabilities of that series and all expenses, costs, charges and reserves
attributable to that series. Any general liabilities, expenses, costs, charges
or reserves of the Trust which are not readily identifiable as belonging to any
particular series shall be allocated and charged by the Trustees between or
among any one or more of the series in such manner as the Trustees in their sole
discretion deem fair and equitable. Each such allocation shall be conclusive and
binding upon the Interestholders of all series for all purposes. Without
limitation of the foregoing provisions of this Section, but subject to the right
of the Trustees in their discretion to allocate general liabilities, expenses,
costs, charges or reserves as herein provided, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular series shall be enforceable against the assets of such
series only, and not against the assets of any other series. Notice of this
limitation on inter-series liabilities may, in the Trustees' sole discretion, be
set forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on inter- series liabilities (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each series.
Every note, bond, contract or other undertaking issued by or on behalf of a
particular series shall include a recitation limiting the obligation represented
thereby to that series and its assets. No Interestholder or former
Interestholder of any series shall have a claim on or any right to any assets
allocated or belonging to any other series.
NB128986.2
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The Trustees shall be authorized to the extent necessary or appropriate
in their discretion to give effect to the preferences and special or relative
rights or privileges of all classes of shares in carrying out the foregoing
powers and, in furtherance of such authority, to allocate assets, income,
earnings, profits and funds and all expenses, costs, charges and reserves
attributable to a series to a particular class of shares of that series or to
apportion the same among two or more classes of shares of that series with the
same effect as allocations made between or among series.
The establishment and designation of any series or of any class of
Interests of any series shall be effective (i) upon the execution by a majority
of the Trustees of an instrument or the adoption in accordance with the terms
hereof of a resolution setting forth such establishment and designation of the
relative rights and preferences of the Interests of such series or class, (ii)
upon the execution of an instrument in writing by an officer of the Trust
pursuant to the vote of a majority of the Trustees, or (iii) as otherwise
provided in either such instrument. At any time that there are no Interests
outstanding of any particular series or class previously established and
designated, the Trustees may by an instrument executed by a majority of the
Trustees or the adoption in accordance with the terms hereof of a resolution (or
by an instrument executed by an officer of the Trust pursuant to the vote of a
majority of the Trustees) abolish that series or class and the establishment and
designation thereof. Each instrument or Trustees' resolution establishing and
designating any series or class shall have the status of an amendment to this
Declaration of Trust.
Section 2. Ownership of Interests. The ownership of Interests will be
recorded in the books of the Trust or a transfer agent. The record books of the
Trust or any transfer agent, as the case may be, shall be conclusive as to who
are the holders of Interests of each series and class and as to the number of
Interests of each series and class held from time to time by each. No
certificates certifying the ownership of Interests need be issued except as the
Trustees may otherwise determine from time to time.
Section 3. Issuance of Interests. The Trustees are authorized, from
time to time, to issue or authorize the issuance of Interests at not less than
the par value thereof, if any, and to fix the price or the minimum price or the
consideration (in cash and/or such other property, real or personal, tangible or
intangible, as from time to time they may determine) or minimum consideration
for such Interests, all without action or approval of the Interestholders.
Interests so issued shall be validly issued, fully paid and, subject to the
obligation of an Interestholder set forth in Section 6, nonassessable. Anything
herein to the contrary notwithstanding, the Trustees may issue Interests pro
rata to the Interestholders of a series at any time for no consideration as a
stock dividend, except to the extent otherwise required or permitted by the
preferences and special or relative rights and
NB128986.2
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privileges of any classes of Interests of that series, and any stock dividend to
the Interestholders of a particular class of Interests shall be made to such
Interestholders pro rata in proportion to the number of Interests of such class
held by each of them.
Interests may be issued in fractional denominations to the same extent
as whole Interests, and Interests in fractional denominations shall be Interests
having proportionately to the respective fractions represented thereby all the
rights of whole Interests, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to participate upon
liquidation of the Trust or of a particular series of Interests.
The Trustees may classify or re-classify any unissued Interests or
Interests previously issued and reacquired of any series or class thereof into
one or more series or classes thereof that may be established and designated
from time to time. The Trustees may hold as treasury Interests, re-issue for
such consideration and on such terms as they may determine, or cancel, in their
discretion from time to time, any interests of any series or class thereof
reacquired by the Trust.
Section 4. No Preemptive or Appraisal Rights; Derivative Suits.
Interestholders shall have no preemptive or appraisal or other right to
subscribe for any additional Interests or other securities issued by the Trust.
Interestholders shall have no right to demand payment for their Interests or any
other rights of dissenting shareholders in the event the Trust participates in
any transaction which would give rise to appraisal or dissenters' rights by a
shareholder of a corporation organized under the General Corporation Law of the
State of Delaware, or otherwise. No action may be brought by an Interestholder
on behalf of the Trust or a series unless Interestholders owning not less than
10 percent of the then outstanding Interests or series join in the bringing of
such action.
Section 5. Status of Interests and Limitation of Personal Liability.
Interests shall be deemed to be personal property giving only the rights
provided in this instrument. Every Person by virtue of having become registered
as an Interestholder on the books of the Trust pursuant to Section 3 of this
Article shall be held to have expressly assented and agreed to the terms hereof
and to be bound by this Declaration of Trust. The death of an Interestholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Interestholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Interests
shall not entitle the Interestholder to any title in or to the whole or any part
of the Trust property or right to call for a partition or division of the same
or for an accounting, nor shall the ownership of Interests constitute the
Interestholders partners.
NB128986.2
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Interestholders of a series of the Trust shall be jointly and severally liable
(with rights of contribution inter se in proportion to their respective
interests in that series) for the liabilities and obligations of such series in
the event the Trust fails to satisfy such liabilities and obligations. Neither
the Trust nor the Trustees, nor any officer, employee or agent of the Trust
shall have any power to bind any Interestholder or Trustee personally or,
subject to the preceding sentence, to call upon any Interestholder for the
payment of any sum of money or assessment whatsoever other than such as the
Interestholder at any time personally may agree to pay by way of subscription
for any Interests or otherwise. Every note, bond, contract or other undertaking
issued by or on behalf of a particular series shall include a recitation
limiting the obligation represented thereby to that series and its assets.
ARTICLE IV
TRUSTEES
Section 1. Election. A Trustee may be elected either by the Trustees or
the Interestholders. The Trustees named herein shall serve until the first
meeting of the Interestholders or until the election and qualification of their
successors. Prior to the first meeting of Interestholders the initial Trustees
hereunder may elect additional Trustees to serve until such meeting and until
their successors are elected and qualified. The Trustees also at any time may
elect Trustees to fill vacancies in the number of Trustees. The number of
Trustees shall be fixed from time to time by the Trustees and, at or after the
commencement of the business of the Trust, shall be not less than three. Each
Trustee, whether named above or hereafter becoming a Trustee, shall serve as a
Trustee during the lifetime of this Trust, until such Trustee dies, resigns,
retires, or is removed, or, if sooner, until the next meeting of Interestholders
called for the purpose of electing Trustees and the election and qualification
of his successor. Subject to Section 16(a) of the 1940 Act, the Trustees may
elect their own successors and, pursuant to this Section, may appoint Trustees
to fill vacancies.
The Trustees shall have the power to set and modify the terms of office
of the Trustees and they may at any time make their terms of limited duration
and lengthen or shorten the terms so established.
Section 2. Powers. The Trustees shall have all powers necessary or
desirable to carry out the purposes of the Trust, including, without limitation,
the powers referred to in Article II hereof. Without limiting the generality of
the foregoing, the Trustees may adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of the business of the Trust and
may amend and repeal them to the extent that they do not reserve that right to
the Interestholders and such By-Laws are deemed to be incorporated and included
in this Declaration of Trust; they may
NB128986.2
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fill vacancies in their number, including vacancies resulting from increases in
their own number, and may elect and remove such officers and employ, appoint and
terminate such employees or agents as they consider appropriate; they may
appoint from their own number and terminate any one or more committees; they may
employ one or more custodians of the assets of the Trust and may authorize such
custodians to employ subcustodians and to deposit all or any part of such assets
in a system or systems for the central handling of securities, retain a transfer
agent and an Interestholder servicing agent, or both, provide for the
distribution of Interests through a principal placement agent or otherwise, set
record dates, and in general delegate such authority as they consider desirable
(including, without limitation, the authority to purchase and sell securities
and to invest funds, to determine the net income of the Trust for any period,
the value of the total assets of the Trust and the net asset value of each
Interest, and to execute such deeds, agreements or other instruments either in
the name of the Trust or the names of the Trustees or as their attorney or
attorneys or otherwise as the Trustees from time to time may deem expedient) to
any officer of the Trust, committee of the Trustees, any such employee, agent,
custodian or underwriter or to any Manager.
Without limiting the generality of the foregoing, the Trustees shall have
full power and authority:
(a) To invest and reinvest cash and to hold cash uninvested;
(b) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such person or
persons as the Trustees shall deem proper, granting to such
person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(c) To hold any security or property in a form not indicating any
trust whether in bearer, unregistered or other negotiable form or
in the name of the Trust or a custodian, subcustodian or other
depository or a nominee or nominees or otherwise;
(d) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or concern, and to pay calls or subscriptions with
respect to any security held in the Trust;
(e) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security with, or transfer any security
to, any such committee, depositary
NB128986.2
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or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of
such committee, depositary or trustee as the Trustees shall deem
proper;
(f) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including, but
not limited to, claims for taxes;
(g) Subject to the provisions of Article III, Section 1, to
allocate assets, liabilities, income and expenses of the
Trust to a particular series of Interests or to apportion
the same among two or more series, provided that any
liabilities or expenses incurred by a particular series
of Interests shall be payable solely out of the assets
and by the Interestholders of that series; and to the
extent necessary or appropriate to give effect to the
preferences and special or relative rights and privileges
of any classes of Interests, to allocate assets,
liabilities, income and expenses of a series to a
particular class of Interests of that series or to
apportion the same among two or more classes of Interests
of that series;
(h) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(i) To purchase and pay for entirely out of Trust property
such insurance as they may deem necessary or appropriate
for the conduct of the business, including, without
limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring
the Interestholders, Trustees, officers, employees,
agents, investment advisers or Managers, principal
underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every
nature arising by reason of holding, being or having held
any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person
as Interestholder, Trustee, officer, employee, agent,
investment adviser or Manager, principal underwriter, or
independent contractor, including any action taken or
omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to
indemnify such person against such liability;
(j) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension,
profit-sharing, share bonus, share purchase, savings, thrift and
other retirement, incentive
NB128986.2
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and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of
providing such retirement and other benefits, for any or all of
the Trustees, officers, employees and agents of the Trust;
(k) To establish a registered office and have a registered
agent in the State of Delaware;
(l) To establish separate and distinct series with separately defined
investment objectives and policies and separately defined
investment purposes in accordance with the provisions of Article
III hereof and to establish classes of such series having
relative rights, powers and duties as they may provide consistent
with applicable law;
(m) Subject to Article X, Section 9 hereof, to reorganize the
Trust; and
(n) Subject to Article X, Section 10 hereof, to sell all or
substantially all of the assets of the Trust or any series.
Further, without limiting the generality of the foregoing, the Trustees
shall have full power and authority to incur and pay out of the principal or
income of the Trust such expenses and liabilities as may be deemed by the
Trustees to be necessary or proper for the purposes of the Trust; provided,
however, that all expenses and liabilities incurred by or arising in connection
with a particular series or class of Interests, as determined by the Trustees,
shall be payable solely out of the assets and by the Interestholders of that
series or class.
Any determination made in good faith and, so far as accounting matters
are involved, in accordance with generally accepted accounting principles by or
pursuant to the authority granted by the Trustees, as to the amount of the
assets, debts, obligations or liabilities of the Trust, its Interestholders or a
particular series or class of Interests; the amount of any reserves or charges
set up and the propriety thereof; the time of or purpose for creating such
reserves or charges; the use, alteration or cancellation of any reserves or
charges (whether or not any debt, obligation or liability for which such
reserves or charges shall have been created shall have been paid or discharged
or shall be then or thereafter required to be paid or discharged); the price or
closing bid or asked price of any investment owned or held by the Trust or a
particular series; the market value of any investment or fair value of any other
asset of the Trust or a particular series; the number of Interests outstanding;
the estimated expense to the Trust or a particular series in connection with
purchases of its Interests; the ability to liquidate investments in an orderly
fashion; and the extent to which it is practicable to deliver a cross-section of
the portfolio of the Trust or a particular series in payment for any such
Interests, or as to any other matters
NB128986.2
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relating to the issue, sale, purchase and/or other acquisition or disposition of
investments or Interests of the Trust or a particular series or class , shall be
final and conclusive, and shall be binding upon the Trust or such series and its
Interestholders, past, present and future, and Interests are issued and sold on
the condition and understanding that any and all such determinations shall be
binding as aforesaid.
In construing the provisions of this Agreement, there shall be a
presumption in favor of the grant of authority and power to the Trustees.
Section 3. Meetings. At any meeting of the Trustees, a majority of the
Trustees then in office shall constitute a quorum. Any meeting may be adjourned
from time to time by a majority of the votes cast upon the question, whether or
not a quorum is present, and the meeting may be held as adjourned without
further notice.
When a quorum is present at any meeting, a majority of the Trustees
present may take any action, except when a larger vote is required by this
Declaration of Trust, the By-Laws or the 1940 Act.
Any action required or permitted to be taken at any meeting of the
Trustees or of any committee thereof may be taken without a meeting, if a
written consent to such action is signed by a majority of the Trustees or
members of any such committee then in office, as the case may be, and such
written consent is filed with the minutes of proceedings of the Trustees or any
such committee.
The Trustees or any committee designated by the Trustees may
participate in a meeting of the Trustees or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
Notwithstanding anything to the contrary stated in this Section 3,
unless otherwise permitted under the 1940 Act, meetings of the Trustees to
approve advisory agreements or distribution arrangements shall be held in
person.
Section 4. Ownership of Assets of the Trust. Title to all of the assets
of each series of Interests of the Trust at all times shall be vested in the
Trust as a separate legal entity under the Delaware Act.
Section 5. Investment Advice and Management Services. The Trustees
shall not in any way be bound or limited by any present or future law or custom
in regard to investments by trustees. The Trustees from time to time may enter
into a written contract or contracts with any person or persons (herein called
the "Manager"), including any firm, corporation, trust or association in which
any Trustee or Interestholder may be interested, to act as investment advisers
and/or managers of the Trust and to provide such
NB128986.2
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investment advice and/or management as the Trustees from time to time may
consider necessary for the proper management of the assets of the Trust,
including, without limitation, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments. Any such contract shall be subject to the requirements
of the 1940 Act with respect to its continuance in effect, its termination and
the method of authorization and approval of such contract, or any amendment
thereto or renewal thereof.
Any Trustee or any organization with which any Trustee may be
associated also may act as broker for the Trust in making purchases and sales of
securities for or to the Trust for its investment portfolio, and may charge and
receive from the Trust the usual and customary commission for such service. Any
organization with which a Trustee may be associated in acting as broker for the
Trust shall be responsible only for the proper execution of transactions in
accordance with the instructions of the Trust and shall be subject to no further
liability of any sort whatever.
The Trustees may also at any time and from time to time contract with
any party to appoint it exclusive or non-exclusive distributor or principal
underwriter for the Interests, every such contract to comply with such
requirements and restrictions as may be set forth in the By-laws or applicable
law, including the 1940 Act. Any such contract shall be subject to the
requirements of the 1940 Act with respect to its continuance in effect, its
termination and the method of authorization and approval of such contract, or
any amendment thereto or renewal thereof. The Manager, or any affiliate thereof,
also may be a distributor or principal underwriter or both for the sale of
Interests by separate contract or may be a person controlled by or affiliated
with any Trustee or any distributor, principal underwriter or a person in which
any Trustee or any distributor is interested financially, subject only to
applicable provisions of law. Nothing herein contained shall operate to prevent
any Manager, who also acts as such a distributor or principal underwriter, from
also receiving compensation for services in such capacity or capacities.
Section 6. Removal and Resignation of Trustees. The Trustees or the
Interestholders (by vote of 66-2/3% of the outstanding Interests entitled to
vote thereon) may remove at any time any Trustee with or without cause, and any
Trustee may resign at any time as Trustee, without penalty by written notice to
the Trust; provided that sixty days' advance written notice shall be given in
the event that there are only three or fewer Trustees at the time a notice of
resignation is submitted.
Section 7. Additional Provisions. The By-Laws may include
further provisions for Trustees' votes and meetings and related
matters not inconsistent with the provisions hereof.
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ARTICLE V
INTERESTHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Interestholders shall have power to vote
only (i) for the election of Trustees as provided in Article IV, Section 1, of
this Declaration of Trust; provided, however, that no meeting of Interestholders
is required to be called for the purpose of electing Trustees unless and until
such time as less than a majority of the Trustees have been elected by the
Interestholders, (ii) for the removal of Trustees as provided in Article IV,
Section 6, (iii) with respect to any Manager as provided in Article IV, Section
5, (iv) with respect to any amendment of this Declaration of Trust as provided
in Article X, Section 8, (v) with respect to the termination of the Trust or a
series or class of Interests as provided in Article X, Section 4, and (vi) with
respect to such additional matters relating to the Trust as may be required by
law, by this Declaration of Trust, or the By-Laws of the Trust or any
registration of the Trust with the Commission or any state, or as the Trustees
may consider desirable. Each whole Interest shall be entitled to one vote as to
any matter on which it is entitled to vote (except that in the election of
Trustees said vote may be cast for as many persons as there are Trustees to be
elected), and each fractional Interest shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this Declaration of
Trust, on any matter submitted to a vote of Interestholders, all Interests of
the Trust then entitled to vote shall be voted in the aggregate as a single
class without regard to series or classes of Interests, except (i) when required
by the 1940 Act or when the Trustees shall have determined that the matter
affects one or more series or classes differently Interests shall be voted by
individual series or class and (ii) when the Trustees have determined that the
matter affects only the interests of one or more series or classes then only
Interestholders of such series or classes shall be entitled to vote thereon.
There shall be no cumulative voting in the election of Trustees. Interests may
be voted in person or by proxy. A proxy with respect to Interests held in the
name of two or more persons shall be valid if executed by any one of them,
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of an Interestholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. Whenever no Interests of any series or class are
issued and outstanding, the Trustees may exercise with respect to such series or
class all rights of Interestholders and may take any action required by law,
this Declaration of Trust or any By-Laws of the Trust to be taken by
Interestholders.
Section 2. Meetings. No annual or regular meeting of
Interestholders is required. Meetings of the Interestholders may
be called by the Trustees or such other person or persons as may be
specified in the By-Laws and shall be called by the Trustees upon
the written request of Interestholders owning at least 10% of the
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outstanding Interests entitled to vote. Interestholders shall be
entitled to at least ten days' prior notice of any meeting.
Section 3. Quorum and Required Vote. Thirty percent (30%) of the
outstanding Interests shall be a quorum for the transaction of business at an
Interestholders' meeting, except that where any provision of law or of this
Declaration of Trust permits or requires that holders of any series or class
shall vote as a series or class, then thirty percent (30%) of the aggregate
number of Interests of that series or class entitled to vote shall be necessary
to constitute a quorum for the transaction of business by that series or class.
Any lesser number, however, shall be sufficient for adjournment and any
adjourned session or sessions may be held within 90 days after the date set for
the original meeting without the necessity of further notice. Except when a
larger vote is required by any provision of this Declaration of Trust or the
By-Laws of the Trust and subject to any applicable requirements of law, a
majority of the Interests voted shall decide any question, provided that where
any provision of law or of this Declaration of Trust permits or requires that
the holders of any series or class shall vote as a series or class, then a
majority of the Interests of that series or class voted on the matter shall
decide that matter insofar as that series or class is concerned.
Section 4. Action by Written Consent. Any action required or permitted
to be taken at any meeting may be taken without a meeting if a consent in
writing, setting forth such action, is signed by a majority of Interestholders
entitled to vote on the subject matter thereof (or such larger proportion
thereof as shall be required by any express provision of this Declaration of
Trust) and such consent is filed with the records of the Trust.
Section 5. Additional Provisions. The By-Laws may include
further provisions for Interestholders' votes and meetings and
related matters.
ARTICLE VI
ALLOCATIONS
Section 1. Net Income and Net Loss. For each day, Net Income or Net
Loss of the Trust, if any, will be allocated among the Interestholders, and
credited or charged, as the case may be, to their Book Capital Accounts and Tax
Capital Accounts, in accordance with their Percentage Interests on such day.
Section 2. Book Sales Gain and Book Sales Loss. For each day, Book
Sales Gain or Book Sales Loss of the Trust, if any, will be allocated among the
Interestholders, and credited or charged, as the case may be, to their Book
Capital Accounts, in accordance with their Percentage Interests on such day.
Section 3. Tax Sales Gain and Tax Sales Loss. For each day,
Tax Sales Gain or Tax Sales Loss of the Trust, if any, will be
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allocated among the Interestholders, and credited or charged, as the case may
be, to their Tax Capital Accounts, as follows:
(a)Tax Sales Gain will be allocated, first, to those Interestholders
with Positive Book/Tax Disparities in proportion to and to the extent thereof,
second, to the Interestholders in such manner so as to eliminate as quickly as
possible any difference between the ratio (expressed as a percentage) of each
Interestholder's Positive Tax/Book Disparity to the aggregate Positive Tax/Book
Disparities of all Interestholders and such Interestholder's Percentage
Interest, and, thereafter, to all Interestholders in accordance with their
Percentage Interests.
(b)Tax Sales Loss will be allocated, first, to those Interestholders
with Positive Tax/Book Disparities in proportion to and to the extent thereof,
second, to the Interestholders in such manner so as to eliminate as quickly as
possible any difference between the ratio (expressed as a percentage) of each
Interestholder's Positive Book/Tax Disparity to the aggregate Positive Book/Tax
Disparities of all Interestholders and such Interestholder's Percentage
Interest, and, thereafter, to all Interestholders in accordance with their
Percentage Interests.
Section 4. Remaining Built-in Gain and Remaining Built-in Loss.
Whenever the Trust recognizes gain or loss for federal income tax purposes from
the sale or other disposition of a Security, any Remaining Built-in Gain or
Remaining Built-in Loss with respect to such Security shall be allocated to the
Interestholder who contributed such Security to the Trust.
Section 5. Remaining Appreciated Gain and Remaining
Appreciated Loss.
(a)For purposes of computing an Interestholder's Positive Book/Tax
Disparity or Positive Tax/Book Disparity, such Interestholder's share of
Remaining Appreciated Gain or Remaining Appreciated Loss with respect to an
Appreciated Security or a Depreciated Security shall be determined by such
Interestholder's Percentage Interest on the day such Security became an
Appreciated Security or a Depreciated Security.
(b)Whenever the Trust recognizes gain or loss for federal income tax
purposes from the sale or other disposition of a Security, any Remaining
Appreciated Gain or Remaining Depreciated Loss with respect to such Security
shall be allocated to the Interestholders in accordance with their Percentage
Interests on the day such Security became an Appreciated Security or a
Depreciated Security.
Section 6. Distribution In-kind. Whenever the Trust makes an in-kind
distribution of a Security to any Interestholder, such Security shall be treated
for all purposes of this Agreement as sold for an amount equal to the Gross
Asset Value of such Security on the day of distribution.
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Section 7. Code Section 754 Adjustment. Whenever an adjustment to the
Adjusted Basis of any Trust Security pursuant to Code Section 734(b) or Code
Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(iv)(m) to
be taken into account in determining capital accounts as the result of a
distribution to an Interestholder in complete liquidation of its interest in the
Trust, appropriate adjustments shall be made in the Tax Capital Accounts (and
related items) of Interestholders to reflect such adjustment. Any elections or
other decisions relating to allocations under this Article VI shall be made by
the Trustees in any manner that reasonably reflects the purpose and intention of
this Agreement. Allocations of Tax Sales Gain, Tax Sales Loss, Remaining
Built-in Gain, Remaining Built-in Loss, Remaining Appreciated Gain and Remaining
Depreciated Loss are solely for purposes of federal, state and local taxes and
shall not affect, or any way to be taken into account, in computing any
Interestholder's Book Capital Account or share of Book Sales Gain and Book Sales
Loss, other related items, or distributions pursuant to any provisions of this
Agreement.
ARTICLE VII
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees shall distribute periodically to
the Interestholders of each series of Interests an amount approximately equal to
the net income of that series, determined by the Trustees or as they may
authorize and as herein provided. Distributions of income may be made in one or
more payments, which shall be in Interests, cash or otherwise, and on a date or
dates and as of a record date or dates determined by the Trustees. At any time
and from time to time in their discretion, the Trustees also may cause to be
distributed to the Interestholders of any one or more series as of a record date
or dates determined by the Trustees, in Interests, cash or otherwise, all or
part of any gains realized on the sale or disposition of the assets of the
series or all or part of any other principal of the Trust attributable to the
series. Each distribution pursuant to this Section 1 shall be made ratably
according to the number of Interests of the series held by the several
Interestholders on the record date for such distribution, except to the extent
otherwise required or permitted by the preferences and special or relative
rights and privileges of any classes of Interests of that series, and any
distribution to the Interestholders of a particular class of Interests shall be
made to such Interestholders pro rata in proportion to the number of Interests
of such class held by each of them. No distribution need be made on Interests
purchased pursuant to orders received, or for which payment is made, after such
time or times as the Trustees may determine.
Section 2. Determination of Net Income. In determining the
net income of each series or class of Interests for any period,
there shall be deducted from income for that period (a) such
portion of all charges, taxes, expenses and liabilities due or
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accrued as the Trustees shall consider properly chargeable and fairly applicable
to income for that period or any earlier period and (b) whatever reasonable
reserves the Trustees shall consider advisable for possible future charges,
taxes, expenses and liabilities which the Trustees shall consider properly
chargeable and fairly applicable to income for that period or any earlier
period. The net income of each series or class for any period may be adjusted
for amounts included on account of net income in the net asset value of
Interests issued or redeemed or repurchased during that period. In determining
the net income of a series or class for a period ending on a date other than the
end of its fiscal year, income may be estimated as the Trustees shall deem fair.
Gains on the sale or disposition of assets shall not be treated as income, and
losses shall not be charged against income unless appropriate under applicable
accounting principles, except in the exercise of the discretionary powers of the
Trustees. Any amount contributed to the Trust which is received as income
pursuant to a decree of any court of competent jurisdiction shall be applied as
required by the said decree.
Section 3. Redemptions. Any Interestholder shall be entitled to require
the Trust to redeem and the Trust shall be obligated to redeem at the option of
such Interestholder all or any part of the Interests owned by said
Interestholder, at the redemption price, pursuant to the method, upon the terms
and subject to the conditions hereinafter set forth:
(a)Certificates for Interests, if issued, shall be presented for
redemption in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose, and these shall be presented with a written request
that the Trust redeem all or any part of the Interests represented thereby.
(b)The redemption price per Interest shall be the net asset value per
Interest when next determined by the Trust at such time or times as the Trustees
shall designate, following the time of presentation of certificates for
Interests, if issued, and an appropriate request for redemption, or such other
time as the Trustees may designate in accordance with any provision of the 1940
Act, or any rule or regulation made or adopted by any securities association
registered under the Securities Exchange Act of 1934, as determined by the
Trustees, less any applicable charge or fee imposed from time to time as
determined by the Trustees.
(c)Net asset value of each series or class of Interests (for the
purpose of issuance of Interests as well as redemptions thereof) shall be
determined by dividing:
(i) the total value of the assets of such series or class
determined as provided in paragraph (d) below less, to the extent
determined by or pursuant to the direction of the Trustees in
accordance with generally accepted accounting principles, all
debts, obligations and liabilities of such series or class (which
debts,
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obligations and liabilities shall include, without limitation of
the generality of the foregoing, any and all debts, obligations,
liabilities, or claims, of any and every kind and nature, fixed,
accrued and otherwise, including the estimated accrued expenses
of management and supervision, administration and distribution
and any reserves or charges for any or all of the foregoing,
whether for taxes, expenses, or otherwise, and the price of
Interests redeemed but not paid for) but excluding the Trust's
liability upon its Interests and its surplus, by
(ii) the total number of Interests of such series or
class outstanding.
The Trustees are empowered, in their absolute discretion, to establish
other methods for determining such net asset value whenever such other methods
are deemed by them to be necessary to enable the Trust to comply with applicable
law, or are deemed by them to be desirable, provided they are not inconsistent
with any provision of the 1940 Act.
(d)In determining for the purposes of this Declaration of Trust the
total value of the assets of each series or class of Interests at any time,
investments and any other assets of such series or class shall be valued in such
manner as may be determined from time to time by or pursuant to the order of the
Trustees.
(e)Payment of the redemption price by the Trust may be made either in
cash or in securities or other assets at the time owned by the Trust or partly
in cash and partly in securities or other assets at the time owned by the Trust.
The value of any part of such payment to be made in securities or other assets
of the Trust shall be the value employed in determining the redemption price.
Payment of the redemption price shall be made on or before the seventh day
following the day on which the Interests are properly presented for redemption
hereunder, except that delivery of any securities included in any such payment
shall be made as promptly as any necessary transfers on the books of the issuers
whose securities are to be delivered may be made, and except as postponement of
the date of payment may be permissible under the 1940 Act.
Pursuant to resolution of the Trustees, the Trust may deduct from the
payment made for any Interests redeemed a liquidating charge not in excess of an
amount determined by the Trustees from time to time.
(f)The right of any holder of Interests redeemed by the Trust as
provided in this Article VII to receive dividends or distributions thereon and
all other rights of such Interestholder with respect to such Interests shall
terminate at the time as of which the redemption price of such Interests is
determined, except the right of such Interestholder to, receive (i) the
redemption price of such Interests from the Trust in accordance with the
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provisions hereof, and (ii) any dividend or distribution to which such
Interestholder previously had become entitled as the record holder of such
Interests on the record date for such dividend or distribution.
(g)Redemption of Interests by the Trust is conditional upon the Trust
having funds or other assets legally available therefor.
(h)The Trust, either directly or through an agent, may repurchase its
Interests, out of funds legally available therefor, upon such terms and
conditions and for such consideration as the Trustees shall deem advisable, by
agreement with the owner at a price not exceeding the net asset value per
Interest as determined by or pursuant to the order of the Trustees at such time
or times as the Trustees shall designate, less any applicable charge, if and as
fixed by the Trustees from time to time, and to take all other steps deemed
necessary or advisable in connection therewith.
(i)Interests purchased or redeemed by the Trust shall be cancelled or
held by the Trust for reissue, as the Trustees from time to time may determine.
(j)The obligations set forth in this Article VII may be suspended or
postponed, (1) for any period (i) during which the New York Stock Exchange is
closed other than for customary weekend and holiday closings, or (ii) during
which trading on the New York Stock Exchange is restricted, (2) for any period
during which an emergency exists as a result of which (i) the disposal by the
Trust of investments owned by it is not reasonably practicable, or (ii) it is
not reasonably practicable for the Trust fairly to determine the value of its
net assets, or (3) for such other periods as the Commission or any successor
governmental authority by order may permit.
(k)Interestholders of a series of the Trust shall not be liable for
obligations of such series arising from conduct on a date or dates after the
date on which they have redeemed their Interests of that series of the Trust.
Notwithstanding any other provision of this Section 3 of Article VII,
if certificates representing such Interests have been issued, the redemption or
repurchase price need not be paid by the Trust until such certificates are
presented in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made.
Section 4. Redemptions at the Option of the Trust. The Trust shall have
the right at its option and at any time to redeem Interests of any
Interestholder at the net asset value thereof as determined in accordance with
Section 3 of Article VII of this Declaration of Trust: (i) if at such time such
Interestholder owns fewer Interests than, or Interests having an aggregate net
asset
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value of less than, an amount determined from time to time by the Trustees; or
(ii) to the extent that such Interestholder owns Interests of a particular
series or class of Interests equal to or in excess of a percentage of the
outstanding Interests of that series or class determined from time to time by
the Trustees; or (iii) to the extent that such Interestholder owns Interests of
the Trust representing a percentage equal to or in excess of such percentage of
the aggregate number of outstanding Interests of the Trust or the aggregate net
asset value of the Trust determined from time to time by the Trustees.
Section 5. Dividends, Distributions, Redemptions and Repurchases. No
dividend or distribution (including, without limitation, any distribution paid
upon termination of the Trust or of any series) with respect to, nor any
redemption or repurchase of, the Interests of any series or class shall be
effected by the Trust other than from the assets of such series or class.
Section 6. Power to Modify Foregoing Powers. Notwithstanding any of the
foregoing provisions of this Article VII, the Trustees may prescribe in their
absolute discretion such other bases and times for the declaration and payment
of dividends and distributions as they may deem desirable or may enable the
Trust to comply with or to obtain desirable treatment under any provision of the
1940 Act or the Code, including any rule or regulation adopted by the Commission
or any securities association registered under the Securities Exchange Act of
1934, as amended, or any order of exemption issued by the Commission or any rule
or regulation issued under the Code, all as in effect now or as hereafter
amended or modified.
ARTICLE VIII
COMPENSATION AND LIMITATION OF
LIABILITY OF TRUSTEES
Section 1. Compensation. The Trustees shall be entitled to
reasonable compensation from the Trust and may fix the amount of
their compensation.
Section 2. Limitation of Liability. A Trustee, when acting in such
capacity, shall not be personally liable to any person other than the Trust or
an Interestholder for any act, omission or obligation of the Trust or any
Trustee. The Trustees shall not be responsible or liable to the Trust or an
Interestholder in any event for any neglect or wrongdoing of any officer, agent,
employee or Manager of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, but nothing herein contained shall protect
any Trustee against any liability to the Trust or an Interestholder to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
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ARTICLE IX
INDEMNIFICATION
Section 1. Indemnification of Trustees, Officers, Employees and Agents.
Each person who is or was a Trustee, officer, employee or agent of the Trust or
who serves or has served at the Trust's request as a director, officer or
trustee of another person in which the Trust has or had any interest as a
shareholder, creditor or otherwise shall be entitled to indemnification out of
the assets of the Trust to the extent provided in, and subject to the provisions
of, the By-Laws, provided that no indemnification shall be granted by the Trust
in contravention of the 1940 Act.
Section 2. Merged Persons. For the purposes of this Article IX
references to "the Trust" include any constituent person (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its directors, trustees, officers, employees or agents as well as the
resulting or surviving person; so that any person who is or was a director,
trustee, officer, employee or agent of such a constituent person or is or was
serving at the request of such a constituent person as a trustee, director,
officer, employee or agent of another person shall stand in the same position
under the provisions of this Article IX with respect to the resulting or
surviving person as he would have with respect to such a constituent person if
its separate existence had continued.
Section 3. Interestholders. In case any Interestholder or former
Interestholder shall be held to be personally liable solely by reason of his
being or having been an Interestholder and not because of his acts or omissions
or for some other reason, the Interestholder or former Interestholder (or his
heirs, executors, administrators or other legal representatives or in the case
of a corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of the particular series of Interests of
which he is or was an Interestholder to be held harmless from and indemnified
against all losses and expenses arising from such liability. Upon request, the
Trust shall cause its counsel to assume the defense of any claim which, if
successful, would result in an obligation of the Trust to indemnify the
Interestholder as aforesaid.
ARTICLE X
OTHER GENERAL PROVISIONS
Section 1. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety. The exercise by the Trustees of their powers and discretion hereunder
under the circumstances then prevailing, shall be binding upon everyone
interested. Subject to Article VIII, Section 2 hereof, a Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of
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Trustee, and for nothing else, and shall not be liable for errors of judgment or
mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust
or otherwise with respect to the management of the Trust, and subject to the
provisions of Section 2 of Article VIII shall be under no liability for any act
or omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.
Section 2. Liability of Third Persons Dealing with Trustees. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees pursuant hereto
or to see to the application of any payments made or property transferred to the
Trust or upon its order.
Section 3. Trustees, Officers, etc. Not Personally Liable; Notice. All
persons extending credit to, contracting with or having any claim against the
Trust, or a particular series of Interests, shall look only to the assets of the
Trust and the Interestholders to the extent set forth in Article III, Section 6
hereof, or the assets and the Interestholders of that particular series of
Interests, for payment under such credit, contract or claim; and neither the
Trustees nor any of the Trust's officers, employees or agents, whether past,
present or future, shall be personally liable therefor. Every note, bond,
contract, instrument, certificate, share, or undertaking and every other act or
thing whatsoever executed or done by or on behalf of the Trust or the Trustees
or any of them in connection with the Trust, shall be deemed conclusively to
have been executed or done only in their or his capacity as Trustees or Trustee,
and such Trustees or Trustee shall not be personally liable thereon. Every note,
bond, contract or other undertaking issued by or on behalf of a particular
series shall include a recitation limiting the obligation represented thereby to
that series and its assets.
Section 4. Termination of Trust. Unless terminated as provided herein,
the Trust shall continue without limitation of time. The Trust may be terminated
at any time by vote of Interestholders holding at least a majority of the
Interests of each series entitled to vote or by the Trustees by written notice
to the Interestholders. Any series or class of Interests may be terminated at
any time by vote of Interestholders holding at least a majority of the Interests
of such series or class entitled to vote or by the Trustees by written notice to
the Interestholders of such series or class.
Upon termination of the Trust or of any one or more series or class of
Interests, after paying or otherwise providing for all charges, taxes, expenses
and liabilities, whether due or accrued or anticipated as may be determined by
the Trustees, the Trust shall reduce, in accordance with such procedures as the
Trustees consider appropriate, the remaining assets to distributable form in
cash or
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shares or other securities, or any combination thereof, and distribute the
proceeds to the Interestholders of the series or class involved, ratably
according to the number of Interests of such series or class held by the several
Interestholders of such series or class on the date of termination, except to
the extent otherwise required or permitted by the preferences and special or
relative rights and privileges of any classes of Interests of that series,
provided that any distribution to the Interestholders of a particular class of
Interests shall be made to such Interestholders pro rata in proportion to the
number of Interests of such class held by each of them.
Upon termination of the Trust, following completion of winding up of
its business, the Trustees shall cause a certificate of cancellation of the
Trust's certificate of trust to be filed in accordance with Section 3810 of the
Delaware Act, which certificate of cancellation may be signed by any one
Trustee.
Section 5. Filing of Copies, References, Headings. The initial Trustees
shall file a certificate of Trust of the Trust with the Secretary of State of
the State of Delaware in accordance with Section 3810 of the Delaware Act. The
original or a copy of this instrument and of each amendment hereto and of each
Declaration of Trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Interestholder. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such amendments or supplemental Declarations of Trust have been made and as
to matters in connection with the Trust hereunder; and, with the same effect as
if it were the original, may rely on a copy certified by an officer of the Trust
to be a copy of this instrument or of any such amendment or supplemental
Declaration of Trust. In this instrument or in any such amendment or
Supplemental Declaration of Trust, references to this instrument, and all
expressions like "herein," "hereof," and "hereunder," shall be deemed to refer
to this instrument as amended or affected by any such amendment or supplemental
Declaration of Trust. Headings are placed herein for convenience of reference
only and in case of any conflict, the text of this instrument, rather than the
headings, shall control. This instrument may be executed in any number of
counterparts each of which shall be deemed an original. This instrument shall
not become effective until a counterpart has been executed by each Trustee.
Section 6. Applicable Law. This Declaration of Trust shall be governed
by and construed in accordance with the laws of the State of Delaware. The trust
created hereby shall be a business trust created under, and subject to the
provisions of, the Delaware Act and may exercise all powers which are ordinarily
exercised by such a trust under the Delaware Act; provided, however, that there
shall not be applicable to the Trust, the Trustees, the Interestholders or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code or (b) any provisions of the Laws (statutory or common) of the
State of Delaware (other
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than the Delaware Act) pertaining to trusts which are inconsistent with the
rights, duties, powers, limitations or liabilities of the Trustees set forth or
referenced in this Declaration of Trust.
Section 7. Amendments. Except as specifically provided herein, the
Trustees may, without Interestholder vote, amend or otherwise supplement this
Declaration of Trust by an instrument in writing signed by a majority of the
Trustees; provided, however, the Interestholders shall have the right to vote
(a) on any amendment which would affect their right to vote granted in Section 1
of Article V hereof, (b) on any amendment to this Section, (c) on any amendment
as may be required by the 1940 Act and (d) on any amendment submitted to them by
the Trustees. Without limiting the generality of the foregoing, amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
provision which is defective or inconsistent with the 1940 Act or with the
requirements of the Code and the regulations thereunder for the Trust's
obtaining desirable treatment thereunder available to regulated investment
companies shall not require authorization by shareholder vote. Any amendment
required or permitted to be submitted to the Interestholders which, as the
Trustees determine, shall affect the Interestholders of one or more series or
class shall be authorized by vote of the Interestholders of each series or class
affected and no vote of Interestholders of a series or class not affected shall
be required.
Section 8. Reorganization. Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust, may, without
Interestholder approval, (a) cause the Trust to merge or consolidate with or
into one or more trusts, partnerships, associations or corporations so long as
the surviving or resulting entity is an investment company under the 1940 Act,
or is a series thereof, or (b) cause the Trust or any series thereof to
incorporate under the laws of the State of Delaware. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of the
Trustees and facsimile signatures conveyed by electronic or telecommunication
means shall be valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of
the Delaware Act, and notwithstanding anything else herein, an agreement of
merger or consolidation approved by the Trustees in accordance with this Section
may effect any amendment to this Declaration of Trust or effect the adoption of
a new declaration of trust of the Trust if it is the surviving or resulting
trust in the merger or consolidation.
Section 9. Sale of Assets. Notwithstanding anything else herein, the
Trustees may, without Interestholder approval, sell and convey all or
substantially all of the assets of the Trust or any series to one or more
trusts, partnerships, associations or corporations so long as the transferee is
an investment company under the 1940 Act, or is a series thereof. Any sale shall
be for such consideration as the Trustees, in their absolute discretion,
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deem adequate and may include the assumption of all outstanding obligations,
taxes and other liabilities, accrued or contingent, of the Trust or any series
and may include shares of beneficial interest, stock or other ownership interest
of the transferee or of a series thereof.
Section 10. Acquisition of Assets. In connection with the acquisition
of all or substantially all the assets or stock of another investment company,
[investment trust or a company classified as a personal holding company under
the Code,] the Trustees may issue or cause to be issued shares of a series or
class and accept in payment therefor in lieu of cash such assets at their market
value or such stock at the market value of the assets held by such investment
company, [investment trust or personal holding company] with or without
adjustment for contingent costs or liabilities.
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IN WITNESS WHEREOF, each of the undersigned Trustees has hereunto set
his/her hand for himself/herself and his/her assigns as of the day and year
first above written.
Trustee
Trustee
Trustee
STATE OF _______ )
: ss.:
COUNTY OF _______ )
On this 5th day of March, 1997, before me personally came the above-named
Trustees of the Fund, to me known, and known to me to be the persons described
in and who executed the foregoing instrument and who duly acknowledged to me
that they had executed the same.
Notary Public
NB128986.2
BY-LAWS
OF
AMERICAN SKANDIA MASTER TRUST
ARTICLE 1
Declaration of Trust and Principal Office
1.1 Declaration of Trust. These By-Laws shall be subject to the
Declaration of Trust, as from time to time in effect (the "Declaration of
Trust"), of the above-captioned Delaware business trust established by the
Declaration of Trust (the "Trust").
1.2 Principal office of the Trust. The principal office of
the Trust shall be located at Ugland House, P.O. Box 309, South
Church Street, George Town, Grand Cayman, BWI.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees from
time to time may determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the President or the Treasurer or by two or more Trustees, sufficient notice
thereof being given to each Trustee by the Secretary or an Assistant Secretary
or by the officer or the Trustees calling the meeting.
2.3 Notice of Special Meetings. It shall be sufficient notice to a
Trustee of a special meeting to send notice by mail at least forty-eight hours
or by telegram at least twenty-four hours before the meeting addressed to the
Trustee at his or her usual or last known business or residence address or to
give notice to him or her in person or by telephone at least twenty-four hours
before the meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her before or after the meeting, is
filed with the records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice to
him or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
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2.4 Notice of Certain Actions by Consent. If in accordance with the
provisions of the Declaration of Trust any action is taken by the Trustees by a
written consent of less than all of the Trustees, then prompt notice of any such
action shall be furnished to each Trustee who did not execute such written
consent, provided that the effectiveness of such action shall not be impaired by
any delay or failure to furnish such notice.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers, if any, as the
Trustees from time to time may in their discretion elect. The Trust also may
have such agents as the Trustees from time to time may in their discretion
appoint. officers may be but need not be a Trustee or Interestholder. Any two or
more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary shall be
elected by the Trustees upon the occurrence of any vacancy in any such office.
Other officers, if any, may be elected or appointed by the Trustees at any time.
Vacancies in any such other office may be filled at any time.
3.3 Tenure. The President, Treasurer and Secretary shall hold office in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these ByLaws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as commonly are incident
to the office occupied by him or her as if the Trust were organized as a
Delaware corporation or such other duties and powers as the Trustees may from
time to time designate.
3.5 President. Unless the Trustees otherwise provide, the President
shall preside at all meetings of the Interestholders and of the Trustees. Unless
the Trustees otherwise provide, the President shall be the chief executive
officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, Interestholder servicing
or similar agent, shall be in charge of the valuable papers, books of account
and accounting records of the Trust, and shall have such other duties and powers
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as may be designated from time to time by the Trustees or by the
President.
3.7 Secretary. The Secretary shall record all proceedings of the
Interestholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the Interestholders or Trustees, an
Assistant Secretary, or if there be none or if he or she is absent, a temporary
Secretary chosen at such meeting shall record the proceedings thereof in the
aforesaid books.
3.8 Resignations and Removals. Any Trustee or officer may resign at any
time by written instrument signed by him or her and delivered to the President
or Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer elected by them with or without cause. Except to
the extent expressly provided in a written agreement with the Trust, no Trustee
or officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
ARTICLE 4
Committees
4.1 Appointment. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees otherwise may
determine, any such committee may make rules for conduct of its business.
4.2 Quorum; Voting. A majority of the members of any Committee of the
Trustees shall constitute a quorum for the transaction of business, and any
action of such a Committee may be taken at a meeting by a vote of a majority of
the members present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the time and in the
manner required by the Declaration of Trust or any applicable law. Officers and
Committees shall render such additional reports as they may deem desirable or as
may from time to time be required by the Trustees.
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ARTICLE 6
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall be subject to
change, by the Board of Trustees.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die with the word
"Delaware," together with the name of the Trust and the year of its organization
cut or engraved thereon but, unless otherwise required by the Trustees, the seal
shall not be necessary to be placed on, and in its absence shall not impair the
validity of, any document, instrument or other paper executed and delivered by
or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases may authorize
the execution thereof in some other manner, all deeds, leases, contracts, notes
and other obligations made by the Trustees shall be signed by the President, any
Vice President, or by the Treasurer and need not bear the seal of the Trust.
ARTICLE 9
Issuance of Interests
9.1 Sale of Interests. Except as otherwise determined by the Trustees,
the Trust will issue and sell for cash or securities from time to time, full and
fractional shares of beneficial interest (the "Interests"), such Interests to be
issued and sold at a price of not less than net asset value per Interest as from
time to time determined in accordance with the Declaration of Trust and these
By-Laws and, in the case of fractional Interests, at a proportionate reduction
in such price. In the case of Interests sold for securities, such securities
shall be valued in accordance with the provisions for determining value of
assets of the Trust as stated in the Declaration of Trust and these By-Laws. The
officers of the Trust are severally authorized to take all such actions as may
be necessary or desirable to carry out this Section 9.1.
9.2 Interest Certificates. In lieu of issuing certificates
for Interests, the Trustees or the transfer agent either may issue
receipts therefor or may keep accounts upon the books of the Trust
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for the record holders of such Interests, who shall in either case, for all
purposes hereunder, be deemed to be the holders of certificates for such
Interests as if they had accepted such certificates and shall be held to have
expressly assented and agreed to the terms hereof.
The Trustees at any time may authorize the issuance of Interest
certificates. In that event, each Interestholder shall be entitled to a
certificate stating the number of Interests owned by him, in such form as shall
be prescribed from time to time by the Trustees. Such certificate shall be
signed by the President or Vice President and by the Treasurer or Assistant
Treasurer. Such signatures may be facsimile if the certificate is signed by a
transfer agent, or by a registrar, other than a Trustee, officer or employee of
the Trust. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall cease to be such officer before such
certificate is issued, it may be issued by the Trust with the same effect as if
he or she were such officer at the time of its issue.
9.3 Loss of Certificates. The Trust, or if any transfer agent is
appointed for the Trust, the transfer agent with the approval of any two
officers of the Trust, is authorized to issue and countersign replacement
certificates for the Interests of the Trust which have been lost, stolen or
destroyed subject to the deposit of a bond or other indemnity in such form and
with such security, if any, as the Trustees may require.
9.4 Discontinuance of Issuance of Certificates. The Trustees at any
time may discontinue the issuance of Interest certificates and by written notice
to each Interestholder, may require the surrender of Interest certificates to
the Trust for cancellation. Such surrender and cancellation shall not affect the
ownership of Interests in the Trust.
ARTICLE 10
Indemnification
10.1 Trustees, Officers, etc. To the fullest extent permitted by law,
the Trust shall indemnify each of its Trustees and officers (including persons
who serve at the Trust's request as directors, officers or trustees of another
person in which the Trust has any interest as an Interestholder, creditor or
otherwise) (hereinafter referred to as a "Covered Person") against all
liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and counsel
fees reasonably incurred by any Covered Person in connection with the defense or
disposition of any action, suit or other proceeding, whether civil, criminal,
administrative or investigative, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
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threatened, while in office or thereafter, in any way relating to the Trust or
by reason of being or having been such a Trustee or officer, except with respect
to any matter as to which such Covered Person shall have been finally
adjudicated in a decision on the merits in any such action, suit or other
proceeding not to have acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust and except that
no Covered Person shall be indemnified against any liability to the Trust or its
Interestholders to which such Covered Person would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but excluding
amounts paid in satisfaction of judgments, in compromise or as fines or
penalties) , shall be paid from time to time by the Trust in advance of the
final disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid by
the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided that (a) such Covered Person
shall provide security for his undertaking, (b) the Trust shall be insured
against losses arising by reason of such Covered Person's failure to fulfill his
undertaking, or (c) a majority of the Trustees who are disinterested persons and
who are not Interested Persons (as that term is defined in the Investment
Company Act of 1940) (provided that a majority of such Trustees then in office
act on the matter), or independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
10.2 Compromise Payment. As to any matter disposed of (whether by a
compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body before
which the proceeding was brought, that such Covered Person either (a) did not
act in good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust or (b) is liable to the Trust or its
Interestholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office, indemnification shall be provided if (a) approved as in the
best interest of the Trust, after notice that it involves such indemnification,
by at least a majority of the Trustees who are disinterested persons and are not
Interested Persons (provided that a majority of such Trustees then in office act
on the matter), upon a determination, based upon a review of readily available
facts (but not a full trial-type inquiry) chat such Covered Person acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and is not liable to the Trust or its Interestholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office, or (b)
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there has been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (but not a full trial-type
inquiry) to the effect that such Covered Person appears to have acted in good
faith in the reasonable belief that such Covered Person's action was in the best
interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which such Covered Person
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in accordance
with this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that such Covered Person's action was in the best
interests of the Trust or to have been liable to the Trust or its
Interestholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office
10.3 Indemnification Not Exclusive. The right of indemnification hereby
provided shall not be exclusive of or affect any other rights to which any such
Covered Person may be entitled. As used in this Article 10, the term "Covered
Person" shall include such person's heirs, executors and administrators, and a
"disinterested person" is a person against whom none of the actions, suits or
other proceedings in question or another action, suit, or other proceeding on
the same or similar grounds is then or has been pending. Nothing contained in
this article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of such person.
10.4 Limitation. Notwithstanding any provisions in the Declaration of
Trust and these By-Laws pertaining to indemnification, all such provisions are
limited by the following undertaking set forth in the rules promulgated by the
Securities and Exchange Commission:
In the event that a claim for indemnification is
asserted by a Trustee, officer or controlling person of the Trust in
connection with the registered securities of the Trust, the Trust will
not make such indemnification unless (i) the Trust has submitted,
before a court or other body, the question of whether the person to be
indemnified was liable by reason of wilful misfeasance, bad faith,
gross negligence, or reckless disregard of duties, and has obtained a
final decision on the merits that such person was not liable by reason
of such conduct or (ii) in the absence of such decision, the Trust
shall have obtained a reasonable determination, based upon a review of
the facts, that such person was not liable by virtue of such conduct,
by (a) the vote of a majority of Trustees who are neither interested
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persons as such term is defined in the Investment Company Act of 1940,
nor parties to the proceeding or (b) an independent legal counsel in a
written opinion.
The Trust will not advance attorneys' fees or other
expenses incurred by the person to be indemnified unless the Trust
shall have (i) received an undertaking by or on behalf of such person
to repay the advance unless it is ultimately determined that such
person is entitled to indemnification and one of the following
conditions shall have occurred: (x) such person shall provide security
for his undertaking, (y) the Trust shall be insured against losses
arising by reason of any lawful advances or (z) a majority of the
disinterested, non- party Trustees of the Trust, or an independent
legal counsel in a written opinion, shall have determined that based on
a review of readily available facts there is reason to believe that
such person ultimately will be found entitled to indemnification.
ARTICLE 11
Interestholders
11.1 Meetings. A meeting of the Interestholders shall be called by the
Secretary whenever ordered by the Trustees, or requested in writing by the
holder or holders of at least 10% of the outstanding Interests entitled to vote
at such meeting. If the meeting is a meeting of the Interestholders of one or
more series of Interests, but not a meeting of all Interestholders of the Trust,
then only the Interestholders of such one or more series shall be entitled to
notice of and to vote at the meeting. If the Secretary, when so ordered or
requested, refuse or neglects for more than five days to call such meeting, the
Trustees, or the Interestholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
11.2 Access to Interestholder List. Interestholders of record may apply
to the Trustees for assistance in communicating with other Interestholders for
the purpose of calling a meeting in order to vote upon the question of removal
of a Trustee. When ten or more Interestholders of record who have been such for
at least six months preceding the date of application and who hold in the
aggregate Interests having a net asset value of at least $25,000 or at least l%
of the outstanding Interests, whichever is less, so apply, the Trustees shall
within five business days either:
(i) afford to such applicants access to a list of names and
addresses of all Interestholders as recorded on the books of the
Trust; or
(ii) inform such applicants of the approximate number of
Interestholders of record and the approximate cost of mailing
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material to them and, within a reasonable time thereafter, mail, materials
submitted by the applicants, to all such Interestholders of record. The Trustees
shall not be obligated to mail materials which they believe to be misleading or
in violation of applicable law.
11.3 Record Dates. For the purpose of determining the Interestholders
of any series who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to receive payment of any dividend or of any other
distribution, the Trustees from time to time may fix a time, which shall be not
more than 90 days before the date of any meeting of Interestholders or the date
of payment of any dividend or of any other distribution, as the record date for
determining the Interestholders of such series having the right to notice of and
to vote at such meeting and any adjournment thereof or the right to receive such
dividend or distribution, and in such case only Interestholders of record on
such record date shall have such right notwithstanding any transfer of Interests
on the books of the Trust after the record date; or without fixing such record
date the Trustees may for any such purposes close the register or transfer books
for all or part of such period.
11.4 Place of Meetings. All meetings of the Interestholders shall be
held at the principal office of the Trust or at such other place within the
United States as shall be designated by the Trustees or the President of the
Trust.
11.5 Notice of Meetings. A written notice of each meeting of
Interestholders, stating the place, date and hour and the purposes of the
meeting, shall be given at least ten days before the meeting to each
Interestholder entitled to vote thereat by leaving such notice with him or at
his residence or usual place of business or by mailing it, postage prepaid, and
addressed to such Interestholder at his address as it appears in the records of
the Trust. Such notice shall be given by the Secretary or an Assistant Secretary
or by an officer designated the Trustees. No notice of any meeting of
Interestholders need be given to a Interestholder if a written waiver of notice,
executed before or after the meeting by such Interestholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.
11.6 Ballots. No ballot shall be required for any election
unless requested by an Interestholder present or represented at the
meeting and entitled to vote in the election.
11.7 Proxies. Interestholders entitled to vote may vote either in
person or by proxy in writing dated not more than six months before the meeting
named therein, which proxies shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
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ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such a majority.
Dated: March 5, 1997
AMERICAN SKANDIA MASTER TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1997 by and between American
Skandia Master Trust, a Delaware business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the ASMT T. Rowe Price
International Equity 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 Board of
Trustees of the Trust (the "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 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 Trustees on a regular basis, written financial reports
and analyses on the Portfolio's securities transactions and the operations of
comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales
of the securities of such issuers and regularly report in writing thereon to the
Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust
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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider sale
of interests in the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best 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. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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 Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto,
shall at all times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable
between the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, 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 Trust 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 Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
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 Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager
may engage, subject to approval of the Trustees and where required, the
shareholders of the Portfolio, a sub-adviser to provide advisory services in
relation to the Portfolio. Under such sub-advisory agreement, the Investment
Manager may delegate to the sub-adviser the duties outlined in subparagraphs
(e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full
compensation for services rendered 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. 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 Trust, and that
officers or trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on June 1,
1997 and by shall continue in force and effect from year to year, provided that
such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding
voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
12. 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 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," as such term is
defined in the ICA.
13. 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, directors or employees, it shall not be subject to liability to
the Trust 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.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees 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 Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment
Manager shall be One Corporate Drive, Shelton, Connecticut 06484.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA,
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 MASTER TRUST
Attest: By: ____________________________________
Gordon C. Boronow
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Thomas M. Mazzaferro
____________________________________ President & Chief Financial Officer
<PAGE>
American Skandia Master Trust
ASMT T. Rowe Price International Equity Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of 1.00% of the average daily net assets of the
Portfolio.
18678-1 (06/97)
AMERICAN SKANDIA MASTER TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1997 by and between American
Skandia Master Trust, a Delaware business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the ASMT Janus Capital 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 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 Board of
Trustees of the Trust (the "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 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 Trustees on a regular basis, written financial reports
and analyses on the Portfolio's securities transactions and the operations of
comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales
of the securities of such issuers and regularly report in writing thereon to the
Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust
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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider sale
of interests in the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best 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. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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 Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto,
shall at all times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable
between the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, 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 Trust 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 Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
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 Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager
may engage, subject to approval of the Trustees and where required, the
shareholders of the Portfolio, a sub-adviser to provide advisory services in
relation to the Portfolio. Under such sub-advisory agreement, the Investment
Manager may delegate to the sub-adviser the duties outlined in subparagraphs
(e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full
compensation for services rendered 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. 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 Trust, and that
officers or trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on June 1,
1997 and by shall continue in force and effect from year to year, provided that
such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding
voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
12. 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 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," as such term is
defined in the ICA.
13. 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, directors or employees, it shall not be subject to liability to
the Trust 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.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees 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 Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment
Manager shall be One Corporate Drive, Shelton, Connecticut 06484.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA,
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 MASTER TRUST
Attest: By: ____________________________________
Gordon C. Boronow
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Thomas M. Mazzaferro
____________________________________ President & Chief Financial Officer
<PAGE>
American Skandia Master Trust
ASMT Janus Capital Growth Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of 1.00% of the average daily net assets of the
Portfolio.
18679-1 (06/97)
AMERICAN SKANDIA MASTER TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1997 by and between American
Skandia Master Trust, a Delaware business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the ASMT INVESCO Equity Income
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 Board of
Trustees of the Trust (the "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 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 Trustees on a regular basis, written financial reports
and analyses on the Portfolio's securities transactions and the operations of
comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales
of the securities of such issuers and regularly report in writing thereon to the
Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust
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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider sale
of interests in the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best 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. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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 Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto,
shall at all times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable
between the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, 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 Trust 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 Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
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 Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager
may engage, subject to approval of the Trustees and where required, the
shareholders of the Portfolio, a sub-adviser to provide advisory services in
relation to the Portfolio. Under such sub-advisory agreement, the Investment
Manager may delegate to the sub-adviser the duties outlined in subparagraphs
(e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full
compensation for services rendered 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. 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 Trust, and that
officers or trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on June 1,
1997 and by shall continue in force and effect from year to year, provided that
such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding
voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
12. 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 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," as such term is
defined in the ICA.
13. 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, directors or employees, it shall not be subject to liability to
the Trust 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.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees 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 Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment
Manager shall be One Corporate Drive, Shelton, Connecticut 06484.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA,
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 MASTER TRUST
Attest: By: ____________________________________
Gordon C. Boronow
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Thomas M. Mazzaferro
____________________________________ President & Chief Financial Officer
American Skandia Master Trust
ASMT INVESCO Equity Income Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of .75% of the average daily net assets of the
Portfolio.
18680-1 (06/97)
AMERICAN SKANDIA MASTER TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1997 by and between American
Skandia Master Trust, a Delaware business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the ASMT PIMCO Total Return Bond
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 Board of
Trustees of the Trust (the "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 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 Trustees on a regular basis, written financial reports
and analyses on the Portfolio's securities transactions and the operations of
comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales
of the securities of such issuers and regularly report in writing thereon to the
Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust
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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider sale
of interests in the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best 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. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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 Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto,
shall at all times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable
between the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, 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 Trust 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 Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
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 Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager
may engage, subject to approval of the Trustees and where required, the
shareholders of the Portfolio, a sub-adviser to provide advisory services in
relation to the Portfolio. Under such sub-advisory agreement, the Investment
Manager may delegate to the sub-adviser the duties outlined in subparagraphs
(e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full
compensation for services rendered 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. 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 Trust, and that
officers or trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on June 1,
1997 and by shall continue in force and effect from year to year, provided that
such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding
voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
12. 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 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," as such term is
defined in the ICA.
13. 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, directors or employees, it shall not be subject to liability to
the Trust 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.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees 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 Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment
Manager shall be One Corporate Drive, Shelton, Connecticut 06484.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA,
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 MASTER TRUST
By: ____________________________________
Gordon C. Boronow
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Thomas M. Mazzaferro
____________________________________ President & Chief Financial Officer
American Skandia Master Trust
ASMT PIMCO Total Return Bond Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of .65% of the average daily net assets of the
Portfolio.
18681-1 (06/97)
AMERICAN SKANDIA MASTER TRUST
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 1st day of June, 1997 by and between American
Skandia Master Trust, a Delaware business trust (the "Trust"), and American
Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "ICA"), and the rules
and regulations promulgated thereunder; and
WHEREAS, the Investment Manager is an investment adviser registered under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Trust and the Investment Manager desire to enter into an agreement
to provide for the management of the assets of the ASMT JPM Money Market
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 Board of
Trustees of the Trust (the "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 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 Trustees on a regular basis, written financial reports
and analyses on the Portfolio's securities transactions and the operations of
comparable investment companies;
(e) determine what issuers and securities shall be represented in the
Portfolio's portfolio and regularly report them in writing to the Trustees;
(f) formulate and implement continuing programs for the purchases and sales
of the securities of such issuers and regularly report in writing thereon to the
Trustees; and
(g) take, on behalf of the Portfolio, all actions which appear to the Trust
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 the Portfolio's 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
Trust's Prospectus and Statement of Additional Information as in effect from
time to time (together, the "Registration Statement"), or as the Trustees may
determine from time to time. Generally, the Investment Manager's primary
consideration in placing Portfolio securities transactions with broker-dealers
for execution will be to obtain, and maintain the availability of, best
execution at the best available price. The Investment Manager may consider sale
of interests in the Portfolio in allocating Portfolio securities transactions,
subject to the requirements of best net price available and most favorable
execution.
Consistent with this policy, the Investment Manager, in allocating
Portfolio securities transactions, will take all relevant factors into
consideration, including, but not limited to: the best 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. Subject to such policies and procedures as the Trustees
may determine, the Investment Manager shall have discretion to effect investment
transactions for the Portfolio through broker-dealers (including, to the extent
permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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 Investment Manager determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Investment Manager's overall
responsibilities with respect to the Portfolio and other accounts as to which
the Investment Manager exercises investment discretion (as such term is defined
in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the
Investment Manager on behalf of the Portfolio to such broker-dealers shall be in
such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and
regulations. The Investment Manager will report on such allocations to the
Trustees regularly as requested by the Trustees, indicating the broker-dealers
to whom such allocations have been made and the basis therefor.
4. Control by the 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 Trust pursuant hereto,
shall at all times be subject to any directives of the Trustees.
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 ICA and the Advisers Act and any rules
and regulations adopted thereunder; and
(b) the provisions of the Registration Statement, including the investment
objectives, policies and restrictions, and permissible investments specified
therein; and
(c) the provisions of the Agreement and Declaration of Trust of the Trust,
as amended; and
(d) the provisions of the By-laws of the Trust, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Trust shall be allocable
between the Trust and the Investment Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost
to the Trust, the services of a President, Secretary, and one or more Vice
Presidents of the Trust, to the extent that such additional officers may be
required by the Trust for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and
without cost to the Trust, a trading function in order to carry out its
obligations under subparagraphs (e), (f) and (g) 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 Trust whose normal duties consist of
maintaining the financial accounts and books and records of
the Trust, 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 Trust 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 Trust shall reimburse the
Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of
the Trust and the offering of its shares shall be borne by the Trust unless
specifically provided otherwise in this paragraph 6. These expenses include, but
are not limited to: (i) brokerage commissions, legal, auditing, taxes or
governmental fees; (ii) the cost of preparing share certificates; (iii)
custodian, depository, transfer and shareholder service agent costs; (iv)
expenses of issue, sale, redemption and repurchase of shares; (v) expenses of
registering and qualifying shares for sale; (vi) insurance premiums on property
or personnel (including officers and trustees if available) of the Trust which
inure to the Trust's benefit; (vii) expenses relating to trustee and shareholder
meetings; (viii) the cost of preparing and distributing reports and notices to
shareholders; (ix) the fees and other expenses incurred by the Trust in
connection with membership in investment company organizations; and (x) and the
cost of printing copies of prospectuses and statements of additional
information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Trustees, the
Investment Manager may perform services on behalf of the Trust which are not
required by this Agreement. Such services will be performed on behalf of the
Trust and the Investment Manager's cost in rendering such services may be billed
monthly to the Trust, subject to examination by the Trust's independent
accountants. Payment or assumption by the Investment Manager of any Trust
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 Trust nor obligate the Investment Manager to pay or assume any similar Trust
expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager
may engage, subject to approval of the Trustees and where required, the
shareholders of the Portfolio, a sub-adviser to provide advisory services in
relation to the Portfolio. Under such sub-advisory agreement, the Investment
Manager may delegate to the sub-adviser the duties outlined in subparagraphs
(e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Trust shall pay the Investment Manager in full
compensation for services rendered 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. 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 Trust, and that
officers or trustees of the Trust 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.
11. Term and Approval. This Agreement shall become effective on June 1,
1997 and by shall continue in force and effect from year to year, provided that
such continuance is specifically approved at least annually by:
(a) the Trustees or the vote of a majority of the Portfolio's outstanding
voting securities (as defined in Section 2(a)(42) of the ICA); and
(b) 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 Trust trustees), by votes cast in person at a meeting specifically called for
such purpose.
12. 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 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," as such term is
defined in the ICA.
13. 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, directors or employees, it shall not be subject to liability to
the Trust 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.
14. Liability of the Trustees and Shareholders. A copy of the Agreement and
Declaration of Trust of the Trust is on file with the Secretary of the State of
Delaware, and notice is hereby given that this instrument is executed on behalf
of the Trustees 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 Trust.
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 Trust or the
Investment Manager may have under applicable law.
15. 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 Trust and the Investment
Manager shall be One Corporate Drive, Shelton, Connecticut 06484.
16. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 the ICA. In addition, where the effect of a requirement of the ICA,
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 MASTER TRUST
Attest: By: ____________________________________
Gordon C. Boronow
____________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ____________________________________
Thomas M. Mazzaferro
____________________________________ President & Chief Financial Officer
<PAGE>
American Skandia Master Trust
ASMT JPM Money Market Portfolio
Investment Management Agreement
EXHIBIT A
An annual rate of .50% of the average daily net assets of the
Portfolio.
18682-1 (06/97)
AMERICAN SKANDIA MASTER TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services,
Incorporated (the "Investment Manager") and Rowe Price-Fleming International,
Inc. (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Master Trust (the "Trust") is a Delaware business
trust organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Trust will serve, at least initially, as an investment vehicle for
other parties, including other open-end investment companies (or series of such
companies) registered under the ICA; and
WHEREAS, certain series of American Skandia Advisor Funds, Inc. (the "Feeder
Fund"), an open-end management investment company established under the laws of
the state of Maryland, currently invest all of their respective investable
assets in corresponding portfolios of the Trust; and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the
Investment Manager to act as investment manager for the ASMT T. Rowe Price
International Equity Portfolio (the "Portfolio"), one series of the Trust, under
the terms of a management agreement, dated June 1, 1997, with the Trust (the
"Management Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Trustees have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Portfolio conforming to the investment
objective, investment policies and restrictions of the Portfolio as set forth in
the Registration Statement of the Trust as in effect from time to time (the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of
the Trust, and any investment guidelines or other instructions received by the
Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect
to the Sub-Adviser until the Sub-Adviser's receipt thereof. The appropriate
officers and employees of the Sub-Adviser will be available to consult with the
Investment Manager, the Trust and Trustees at reasonable times and upon
reasonable notice concerning the business of the Trust, including valuations of
securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA;
provided it is understood that the Sub-Adviser is not responsible for daily
pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Trustees, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Portfolio or otherwise represented
in the Portfolio's investment portfolio from time to time and, subject to the
provisions of paragraph 3 of this Agreement, 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-Adviser
designated by the Sub-Adviser 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-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Portfolio or the Portfolio's shareholders the information required to be
provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be
the property of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Portfolio to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and
determinations of the Trust and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Portfolio, as set out in the
Registration Statement in effect, or as such investment policies and
restrictions from time to time may be amended by the Portfolio's shareholders or
the Trustees and communicated to the Sub-Adviser in writing; (vii) the
Registration Statement; and (viii) investment guidelines or other instructions
received in writing from the Investment Manager. Notwithstanding the foregoing,
the Sub-Adviser shall have no responsibility to monitor compliance with
limitations or restrictions for which information from the Investment Manager or
its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is
provided to the Sub-adviser in writing. The Sub-Adviser 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-advisers to provide investment advice and other
services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Portfolio or such other
series or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F reflecting the Portfolio's securities holdings. The
Sub-Adviser 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. Investment Advisory Facilities. The Sub-Adviser, at its expense, will
furnish all necessary investment facilities, including salaries of personnel,
required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and
reinvestment of the assets of the Portfolio, the Sub-Adviser is responsible for
the selection of broker-dealers to execute purchase and sale transactions for
the Portfolio in conformity with the policy regarding brokerage as set forth in
the Registration Statement or as the Trustees may determine from time to time,
as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Portfolio investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
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. Subject to such policies and procedures
as the Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Portfolio through broker-dealers (including, to
the extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Portfolio to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the
Sub-Adviser may also consider the sale of interests in the Portfolio, or may
consider or follow recommendations of the Investment Manager that take such
sales into account, as factors in the selection of broker-dealers to effect the
Portfolio's investment transactions. Notwithstanding the above, nothing shall
require the Sub-Adviser to use a broker-dealer which provides research services
or to use a particular broker-dealer which the Investment Manager has
recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Portfolio, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Portfolio or
discuss the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Portfolio to be inspected and audited by the
Trust, the Investment Manager or their respective agents at all reasonable times
during normal business hours upon reasonable notice. The Sub-Adviser shall
immediately notify both the Investment Manager and the Trust of any legal
process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the
Portfolio or the Trust. The Sub-Adviser shall promptly notify the Investment
Manager of any changes in any information regarding the Sub-Adviser or the
investment program for the Portfolio as described in Section 9 of this
Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Portfolio shall be valued as set forth in the Registration Statement. If
this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser 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 the Investment Manager, the Portfolio or the
Trust. Except as otherwise specifically provided herein, the Investment Manager,
the Portfolio and the Trust will not be obligated to pay any expenses of the
Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on
the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Sub-Adviser as portfolio manager of the Portfolio and approving the form of this
Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as
investment manager to the Portfolio and approving the form of the Management
Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in
effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become 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. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser 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 will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser 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. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Portfolio, is to be regarded
as confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) 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; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser 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-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser 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.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by
the Trust, the Portfolio, the Portfolio's shareholders or the Investment Manager
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 or limitation
of any rights which the Trust, the Portfolio or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The
Investment Manager further acknowledges that the Sub-Adviser shall be in all
respects free to take action with respect to investments in securities or other
interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Portfolio. The Investment Manager
understands that the Sub-Adviser shall not favor or disfavor any of the
Sub-Adviser's clients or class of clients in the allocation of investment
opportunities, so that to the extent practical, such opportunities will be
allocated among the Sub-Adviser's clients over a period of time on a fair and
equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation (i) to purchase or sell, or recommend for purchase or sale, for the
Portfolio any security which the Sub-Adviser, its partners, affiliates or
employees may purchase or sell for the Sub-Adviser or such partner's,
affiliate's or employee's own accounts or for the account of any other client of
the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or
sale of any security for the Sub-Adviser's other clients, advisory or otherwise,
which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
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 Trustees 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 the Sub-Adviser upon 60 days written notice, and will automatically
terminate in the event of (i) its "assignment" by either party to this
Agreement, as such term is defined in the ICA, subject to such exemptions as may
be granted by the Securities and Exchange Commission by rule, regulation or
order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within
a reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Portfolio or
who have been authorized to give instructions to the Custodian.
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 recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: Thomas M. Mazzaferro
President & Chief Operating Officer
Sub-Adviser: Rowe Price-Fleming International, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Attention: Henry H. Hopkins, Esq.
Trust: American Skandia Master Trust
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act"), controls ("controlling person") the Investment
Manager, against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Investment Manager
or such affiliated person or controlling person of the Investment Manager may
become subject under the 1933 Act, the ICA, the Advisers Act, under any other
statute, law, rule or regulation, at common law or otherwise, arising out of the
Sub-Adviser's responsibilities hereunder (1) to the extent of and as a result of
the willful misconduct, bad faith, or gross negligence by the Sub-Adviser, any
of the Sub-Adviser's employees or representatives or any affiliate of or any
person acting on behalf of the Sub-Adviser, or (2) as a result of any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including 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 and in
conformity with written information furnished by the Sub-Adviser to the
Investment Manager, the Portfolio, the Trust or any affiliated person of the
Investment Manager, the Portfolio or the Trust or upon verbal information
confirmed by the Sub-Adviser in writing, or (3) to the extent of, and as a
result of, the failure of the Sub-Adviser to execute, or cause to be executed,
portfolio investment transactions according to the requirements of the ICA;
provided, however, that in no case is the Sub-Adviser's indemnity in favor of
the Investment Manager or any affiliated person or controlling person of the
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 the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the 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 the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be
governed by and construed in accordance with, the laws of the State of
Connecticut.
18. Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement is held to be illegal or made
invalid by court decision, statute, rule or otherwise, such illegality or
invalidity will not affect the validity or enforceability of the remainder of
this Agreement.
The effective date of this agreement is June 1, 1997.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ----------------------------------- -----------------------------------
Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
18618-1 (06/97)
<PAGE>
American Skandia Master Trust
ASMT T. Rowe Price International Equity Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .75% of the portion of the average daily net assets
of the Portfolio not in excess of $20 million; plus .60% of the portion over $20
million but not in excess of $50 million; plus .50% of the portion over $50
million.
When the average daily net assets of the Portfolio equal or exceed $200
million, the annual rate will be .50% of the average daily net assets of the
Portfolio.
AMERICAN SKANDIA MASTER TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Janus Capital Corporation (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Master Trust (the "Trust") is a Delaware business
trust organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Trust will serve, at least initially, as an investment vehicle for
other parties, including other open-end investment companies (or series of such
companies) registered under the ICA; and
WHEREAS, certain series of American Skandia Advisor Funds, Inc. (the "Feeder
Fund"), an open-end management investment company established under the laws of
the state of Maryland, currently invest all of their respective investable
assets in corresponding portfolios of the Trust; and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the
Investment Manager to act as investment manager for the ASMT Janus Capital
Growth Portfolio (the "Portfolio"), one series of the Trust, under the terms of
a management agreement, dated June 1, 1997, with the Trust (the "Management
Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Trustees have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Portfolio conforming to the investment
objective, investment policies and restrictions of the Portfolio as set forth in
the Registration Statement of the Trust as in effect from time to time (the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of
the Trust, and any investment guidelines or other instructions received by the
Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect
to the Sub-Adviser until the Sub-Adviser's receipt thereof. The appropriate
officers and employees of the Sub-Adviser will be available to consult with the
Investment Manager, the Trust and Trustees at reasonable times and upon
reasonable notice concerning the business of the Trust, including valuations of
securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA;
provided it is understood that the Sub-Adviser is not responsible for daily
pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Trustees, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Portfolio or otherwise represented
in the Portfolio's investment portfolio from time to time and, subject to the
provisions of paragraph 3 of this Agreement, 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-Adviser
designated by the Sub-Adviser 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-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Portfolio or the Portfolio's shareholders the information required to be
provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be
the property of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Portfolio to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and
determinations of the Trust and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Portfolio, as set out in the
Registration Statement in effect, or as such investment policies and
restrictions from time to time may be amended by the Portfolio's shareholders or
the Trustees and communicated to the Sub-Adviser in writing; (vii) the
Registration Statement; and (viii) investment guidelines or other instructions
received in writing from the Investment Manager. Notwithstanding the foregoing,
the Sub-Adviser shall have no responsibility to monitor compliance with
limitations or restrictions for which information from the Investment Manager or
its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is
provided to the Sub-adviser in writing. The Sub-Adviser 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-advisers to provide investment advice and other
services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Portfolio or such other
series or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F reflecting the Portfolio's securities holdings. The
Sub-Adviser 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. Investment Advisory Facilities. The Sub-Adviser, at its expense, will
furnish all necessary investment facilities, including salaries of personnel,
required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and
reinvestment of the assets of the Portfolio, the Sub-Adviser is responsible for
the selection of broker-dealers to execute purchase and sale transactions for
the Portfolio in conformity with the policy regarding brokerage as set forth in
the Registration Statement or as the Trustees may determine from time to time,
as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Portfolio investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
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. Subject to such policies and procedures
as the Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Portfolio through broker-dealers (including, to
the extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Portfolio to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Portfolio, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Portfolio or
discuss the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Portfolio to be inspected and audited by the
Trust, the Investment Manager or their respective agents at all reasonable times
during normal business hours upon reasonable notice. The Sub-Adviser shall
immediately notify both the Investment Manager and the Trust of any legal
process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the
Portfolio or the Trust. The Sub-Adviser shall promptly notify the Investment
Manager of any changes in any information regarding the Sub-Adviser or the
investment program for the Portfolio as described in Section 9 of this
Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Portfolio shall be valued as set forth in the Registration Statement. If
this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser 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 the Investment Manager, the Portfolio or the
Trust. Except as otherwise specifically provided herein, the Investment Manager,
the Portfolio and the Trust will not be obligated to pay any expenses of the
Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on
the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Sub-Adviser as portfolio manager of the Portfolio and approving the form of this
Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as
investment manager to the Portfolio and approving the form of the Management
Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in
effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become 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. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser 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 will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser 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. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Portfolio, is to be regarded
as confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) 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; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser 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-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser 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.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by
the Trust, the Portfolio, the Portfolio's shareholders or the Investment Manager
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 or limitation
of any rights which the Trust, the Portfolio or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The
Investment Manager further acknowledges that the Sub-Adviser shall be in all
respects free to take action with respect to investments in securities or other
interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Portfolio. The Investment Manager
understands that the Sub-Adviser shall not favor or disfavor any of the
Sub-Adviser's clients or class of clients in the allocation of investment
opportunities, so that to the extent practical, such opportunities will be
allocated among the Sub-Adviser's clients over a period of time on a fair and
equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation (i) to purchase or sell, or recommend for purchase or sale, for the
Portfolio any security which the Sub-Adviser, its partners, affiliates or
employees may purchase or sell for the Sub-Adviser or such partner's,
affiliate's or employee's own accounts or for the account of any other client of
the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or
sale of any security for the Sub-Adviser's other clients, advisory or otherwise,
which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
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 Trustees 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 the Sub-Adviser upon 60 days written notice, and will automatically
terminate in the event of (i) its "assignment" by either party to this
Agreement, as such term is defined in the ICA, subject to such exemptions as may
be granted by the Securities and Exchange Commission by rule, regulation or
order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Portfolio (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the
Custodian. The Sub-adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Portfolio or the
Trust to amend or supplement the Trust's or the Feeder Fund's prospectus to
reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA,
the Securities Act of 1933, as amended (the "1933 Act") or any other applicable
statute, law, rule or regulation, as a result of such change; provided, however,
that the Sub-Adviser shall not be responsible for such costs and expenses where
the change in Portfolio Manager(s) reflects the termination of employment of the
Portfolio Manager(s) with the Sub-Adviser and its affiliates or is a result of a
request by the Investment Manager or is due to other circumstances beyond the
Sub-Adviser's control.
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 recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: Thomas M. Mazzaferro
President & Chief Operating Officer
Sub-Adviser: Janus Capital Corporation
100 Fillmore Street, Suite 400
Denver, Colorado 80206-4923
Attention: General Counsel
Trust: American Skandia Master Trust
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Investment Manager or such affiliated person or
controlling person of the Investment Manager may become subject under the 1933
Act, the ICA, the Advisers Act, under any other statute, law, rule or
regulation, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities hereunder (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the
Sub-Adviser's employees or representatives or any affiliate of or any person
acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 and in conformity with
written information furnished by the Sub-Adviser to the Investment Manager, the
Portfolio, the Trust or any affiliated person of the Investment Manager, the
Portfolio or the Trust or upon verbal information confirmed by the Sub-Adviser
in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment
transactions according to the requirements of the ICA; provided, however, that
in no case is the Sub-Adviser's indemnity in favor of the Investment Manager or
any affiliated person or controlling person of the 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 the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the 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 the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be
governed by and construed in accordance with, the laws of the State of
Connecticut.
18. Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement is held to be illegal or made
invalid by court decision, statute, rule or otherwise, such illegality or
invalidity will not affect the validity or enforceability of the remainder of
this Agreement.
The effective date of this agreement is June 1, 1997.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
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Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
18619-1 (06/97)
<PAGE>
American Skandia Master Trust
ASMT Janus Capital Growth Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .45% of the average daily net assets of the
Portfolio.
8
AMERICAN SKANDIA MASTER TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and INVESCO Trust Company (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Master Trust (the "Trust") is a Delaware business
trust organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Trust will serve, at least initially, as an investment vehicle for
other parties, including other open-end investment companies (or series of such
companies) registered under the ICA; and
WHEREAS, certain series of American Skandia Advisor Funds, Inc. (the "Feeder
Fund"), an open-end management investment company established under the laws of
the state of Maryland, currently invest all of their respective investable
assets in corresponding portfolios of the Trust; and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the
Investment Manager to act as investment manager for the ASMT INVESCO Equity
Income Portfolio (the "Portfolio"), one series of the Trust, under the terms of
a management agreement, dated June 1, 1997, with the Trust (the "Management
Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Trustees have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Portfolio conforming to the investment
objective, investment policies and restrictions of the Portfolio as set forth in
the Registration Statement of the Trust as in effect from time to time (the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of
the Trust, and any investment guidelines or other instructions received by the
Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect
to the Sub-Adviser until the Sub-Adviser's receipt thereof. The appropriate
officers and employees of the Sub-Adviser will be available to consult with the
Investment Manager, the Trust and Trustees at reasonable times and upon
reasonable notice concerning the business of the Trust, including valuations of
securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA;
provided it is understood that the Sub-Adviser is not responsible for daily
pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Trustees, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Portfolio or otherwise represented
in the Portfolio's investment portfolio from time to time and, subject to the
provisions of paragraph 3 of this Agreement, 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-Adviser
designated by the Sub-Adviser 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-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Portfolio or the Portfolio's shareholders the information required to be
provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be
the property of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Portfolio to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and
determinations of the Trust and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Portfolio, as set out in the
Registration Statement in effect, or as such investment policies and
restrictions from time to time may be amended by the Portfolio's shareholders or
the Trustees and communicated to the Sub-Adviser in writing; (vii) the
Registration Statement; and (viii) investment guidelines or other instructions
received in writing from the Investment Manager. Notwithstanding the foregoing,
the Sub-Adviser shall have no responsibility to monitor compliance with
limitations or restrictions for which information from the Investment Manager or
its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is
provided to the Sub-adviser in writing. The Sub-Adviser 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-advisers to provide investment advice and other
services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Portfolio or such other
series or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F reflecting the Portfolio's securities holdings. The
Sub-Adviser 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. Investment Advisory Facilities. The Sub-Adviser, at its expense, will
furnish all necessary investment facilities, including salaries of personnel,
required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and
reinvestment of the assets of the Portfolio, the Sub-Adviser is responsible for
the selection of broker-dealers to execute purchase and sale transactions for
the Portfolio in conformity with the policy regarding brokerage as set forth in
the Registration Statement or as the Trustees may determine from time to time,
as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Portfolio investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
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. Subject to such policies and procedures
as the Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Portfolio through broker-dealers (including, to
the extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Portfolio to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the
Sub-Adviser may also consider the sale of interests in the Portfolio, or may
consider or follow recommendations of the Investment Manager that take such
sales into account, as factors in the selection of broker-dealers to effect the
Portfolio's investment transactions. Notwithstanding the above, nothing shall
require the Sub-Adviser to use a broker-dealer which provides research services
or to use a particular broker-dealer which the Investment Manager has
recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Portfolio, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Portfolio or
discuss the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Portfolio to be inspected and audited by the
Trust, the Investment Manager or their respective agents at all reasonable times
during normal business hours upon reasonable notice. The Sub-Adviser shall
immediately notify both the Investment Manager and the Trust of any legal
process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the
Portfolio or the Trust. The Sub-Adviser shall promptly notify the Investment
Manager of any changes in any information regarding the Sub-Adviser or the
investment program for the Portfolio as described in Section 9 of this
Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Portfolio shall be valued as set forth in the Registration Statement. If
this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser 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 the Investment Manager, the Portfolio or the
Trust. Except as otherwise specifically provided herein, the Investment Manager,
the Portfolio and the Trust will not be obligated to pay any expenses of the
Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on
the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Sub-Adviser as portfolio manager of the Portfolio and approving the form of this
Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as
investment manager to the Portfolio and approving the form of the Management
Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in
effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become 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. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser 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 will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser 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. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Portfolio, is to be regarded
as confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) 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; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser 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-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser 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.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by
the Trust, the Portfolio, the Portfolio's shareholders or the Investment Manager
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 or limitation
of any rights which the Trust, the Portfolio or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The
Investment Manager further acknowledges that the Sub-Adviser shall be in all
respects free to take action with respect to investments in securities or other
interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Portfolio. The Investment Manager
understands that the Sub-Adviser shall not favor or disfavor any of the
Sub-Adviser's clients or class of clients in the allocation of investment
opportunities, so that to the extent practical, such opportunities will be
allocated among the Sub-Adviser's clients over a period of time on a fair and
equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation (i) to purchase or sell, or recommend for purchase or sale, for the
Portfolio any security which the Sub-Adviser, its partners, affiliates or
employees may purchase or sell for the Sub-Adviser or such partner's,
affiliate's or employee's own accounts or for the account of any other client of
the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or
sale of any security for the Sub-Adviser's other clients, advisory or otherwise,
which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
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 Trustees 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 the Sub-Adviser upon 60 days written notice, and will automatically
terminate in the event of (i) its "assignment" by either party to this
Agreement, as such term is defined in the ICA, subject to such exemptions as may
be granted by the Securities and Exchange Commission by rule, regulation or
order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Portfolio (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the
Custodian. The Sub-adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Portfolio or the
Trust to amend or supplement the Trust's or the Feeder Fund's prospectus to
reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA,
the Securities Act of 1933, as amended (the "1933 Act") or any other applicable
statute, law, rule or regulation, as a result of such change; provided, however,
that the Sub-Adviser shall not be responsible for such costs and expenses where
the change in Portfolio Manager(s) reflects the termination of employment of the
Portfolio Manager(s) with the Sub-Adviser and its affiliates or is a result of a
request by the Investment Manager or is due to other circumstances beyond the
Sub-Adviser's control.
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 recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: Thomas M. Mazzaferro
President & Chief Operating Officer
Sub-Adviser: INVESCO Trust Company
7800 East Union Avenue
P.O. Box 173706
Denver, Colorado 80217-3706
Attention: Glen A. Payne, Esq.
Trust: American Skandia Master Trust
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Investment Manager or such affiliated person or
controlling person of the Investment Manager may become subject under the 1933
Act, the ICA, the Advisers Act, under any other statute, law, rule or
regulation, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities hereunder (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the
Sub-Adviser's employees or representatives or any affiliate of or any person
acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 and in conformity with
written information furnished by the Sub-Adviser to the Investment Manager, the
Portfolio, the Trust or any affiliated person of the Investment Manager, the
Portfolio or the Trust or upon verbal information confirmed by the Sub-Adviser
in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment
transactions according to the requirements of the ICA; provided, however, that
in no case is the Sub-Adviser's indemnity in favor of the Investment Manager or
any affiliated person or controlling person of the 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 the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the 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 the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be
governed by and construed in accordance with, the laws of the State of
Connecticut.
18. Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement is held to be illegal or made
invalid by court decision, statute, rule or otherwise, such illegality or
invalidity will not affect the validity or enforceability of the remainder of
this Agreement.
The effective date of this agreement is June 1, 1997.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ----------------------------------- ----------------------------------
Date: ____________________________ Date: __________________________
Attest: ____________________________ Attest: __________________________
18620-1 (06/97)
<PAGE>
American Skandia Master Trust
ASMT INVESCO Equity Income Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .35% of the average daily net assets of the
Portfolio.
AMERICAN SKANDIA MASTER TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Pacific Investment Management Company (the
"Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Master Trust (the "Trust") is a Delaware business
trust organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Trust will serve, at least initially, as an investment vehicle for
other parties, including other open-end investment companies (or series of such
companies) registered under the ICA; and
WHEREAS, certain series of American Skandia Advisor Funds, Inc. (the "Feeder
Fund"), an open-end management investment company established under the laws of
the state of Maryland, currently invest all of their respective investable
assets in corresponding portfolios of the Trust; and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the
Investment Manager to act as investment manager for the ASMT PIMCO Total Return
Bond Portfolio (the "Portfolio"), one series of the Trust, under the terms of a
management agreement, dated June 1, 1997, with the Trust (the "Management
Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Trustees have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Portfolio conforming to the investment
objective, investment policies and restrictions of the Portfolio as set forth in
the Registration Statement of the Trust as in effect from time to time (the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of
the Trust, and any investment guidelines or other instructions received by the
Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect
to the Sub-Adviser until the Sub-Adviser's receipt thereof. The appropriate
officers and employees of the Sub-Adviser will be available to consult with the
Investment Manager, the Trust and Trustees at reasonable times and upon
reasonable notice concerning the business of the Trust, including valuations of
securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA;
provided it is understood that the Sub-Adviser is not responsible for daily
pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Trustees, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Portfolio or otherwise represented
in the Portfolio's investment portfolio from time to time and, subject to the
provisions of paragraph 3 of this Agreement, 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-Adviser
designated by the Sub-Adviser 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-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Portfolio or the Portfolio's shareholders the information required to be
provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be
the property of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Portfolio to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and
determinations of the Trust and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Portfolio, as set out in the
Registration Statement in effect, or as such investment policies and
restrictions from time to time may be amended by the Portfolio's shareholders or
the Trustees and communicated to the Sub-Adviser in writing; (vii) the
Registration Statement; and (viii) investment guidelines or other instructions
received in writing from the Investment Manager. Notwithstanding the foregoing,
the Sub-Adviser shall have no responsibility to monitor compliance with
limitations or restrictions for which information from the Investment Manager or
its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is
provided to the Sub-adviser in writing. The Sub-Adviser 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-advisers to provide investment advice and other
services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Portfolio or such other
series or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F reflecting the Portfolio's securities holdings. The
Sub-Adviser 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. Investment Advisory Facilities. The Sub-Adviser, at its expense, will
furnish all necessary investment facilities, including salaries of personnel,
required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and
reinvestment of the assets of the Portfolio, the Sub-Adviser is responsible for
the selection of broker-dealers to execute purchase and sale transactions for
the Portfolio in conformity with the policy regarding brokerage as set forth in
the Registration Statement or as the Trustees may determine from time to time,
as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Portfolio investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
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. Subject to such policies and procedures
as the Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Portfolio through broker-dealers (including, to
the extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Portfolio to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the
Sub-Adviser may also consider the sale of interests in the Portfolio, or may
consider or follow recommendations of the Investment Manager that take such
sales into account, as factors in the selection of broker-dealers to effect the
Portfolio's investment transactions. Notwithstanding the above, nothing shall
require the Sub-Adviser to use a broker-dealer which provides research services
or to use a particular broker-dealer which the Investment Manager has
recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Portfolio, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Portfolio or
discuss the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Portfolio to be inspected and audited by the
Trust, the Investment Manager or their respective agents at all reasonable times
during normal business hours upon reasonable notice. The Sub-Adviser shall
immediately notify both the Investment Manager and the Trust of any legal
process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the
Portfolio or the Trust. The Sub-Adviser shall promptly notify the Investment
Manager of any changes in any information regarding the Sub-Adviser or the
investment program for the Portfolio as described in Section 9 of this
Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Portfolio shall be valued as set forth in the Registration Statement. If
this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser 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 the Investment Manager, the Portfolio or the
Trust. Except as otherwise specifically provided herein, the Investment Manager,
the Portfolio and the Trust will not be obligated to pay any expenses of the
Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on
the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Sub-Adviser as portfolio manager of the Portfolio and approving the form of this
Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as
investment manager to the Portfolio and approving the form of the Management
Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in
effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become 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. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser 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 will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser 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. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Portfolio, is to be regarded
as confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) 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; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser 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-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser 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.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by
the Trust, the Portfolio, the Portfolio's shareholders or the Investment Manager
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 or limitation
of any rights which the Trust, the Portfolio or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The
Investment Manager further acknowledges that the Sub-Adviser shall be in all
respects free to take action with respect to investments in securities or other
interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Portfolio. The Investment Manager
understands that the Sub-Adviser shall not favor or disfavor any of the
Sub-Adviser's clients or class of clients in the allocation of investment
opportunities, so that to the extent practical, such opportunities will be
allocated among the Sub-Adviser's clients over a period of time on a fair and
equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation (i) to purchase or sell, or recommend for purchase or sale, for the
Portfolio any security which the Sub-Adviser, its partners, affiliates or
employees may purchase or sell for the Sub-Adviser or such partner's,
affiliate's or employee's own accounts or for the account of any other client of
the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or
sale of any security for the Sub-Adviser's other clients, advisory or otherwise,
which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
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 Trustees 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 the Sub-Adviser upon 60 days written notice, and will automatically
terminate in the event of (i) its "assignment" by either party to this
Agreement, as such term is defined in the ICA, subject to such exemptions as may
be granted by the Securities and Exchange Commission by rule, regulation or
order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Portfolio (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the
Custodian. The Sub-adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Portfolio or the
Trust to amend or supplement the Trust's or the Feeder Fund's prospectus to
reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA,
the Securities Act of 1933, as amended (the "1933 Act") or any other applicable
statute, law, rule or regulation, as a result of such change; provided, however,
that the Sub-Adviser shall not be responsible for such costs and expenses where
the change in Portfolio Manager(s) reflects the termination of employment of the
Portfolio Manager(s) with the Sub-Adviser and its affiliates or is a result of a
request by the Investment Manager or is due to other circumstances beyond the
Sub-Adviser's control.
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 recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: Thomas M. Mazzaferro
President & Chief Operating Officer
Sub-Adviser: Pacific Investment Management Company
840 Newport Center Drive, Suite 360
Newport Beach, California 92660
Attention: Gordon C. Hally
Trust: American Skandia Master Trust
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Investment Manager or such affiliated person or
controlling person of the Investment Manager may become subject under the 1933
Act, the ICA, the Advisers Act, under any other statute, law, rule or
regulation, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities hereunder (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the
Sub-Adviser's employees or representatives or any affiliate of or any person
acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 and in conformity with
written information furnished by the Sub-Adviser to the Investment Manager, the
Portfolio, the Trust or any affiliated person of the Investment Manager, the
Portfolio or the Trust or upon verbal information confirmed by the Sub-Adviser
in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment
transactions according to the requirements of the ICA; provided, however, that
in no case is the Sub-Adviser's indemnity in favor of the Investment Manager or
any affiliated person or controlling person of the 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 the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the 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 the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be
governed by and construed in accordance with, the laws of the State of
Connecticut.
18. Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement is held to be illegal or made
invalid by court decision, statute, rule or otherwise, such illegality or
invalidity will not affect the validity or enforceability of the remainder of
this Agreement.
The effective date of this agreement is June 1, 1997.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ----------------------------------- -----------------------------------
Date: ___________________________ Date: ____________________________
Attest: ___________________________ Attest: ____________________________
18621-1 (06/97)
<PAGE>
American Skandia Master Trust
ASMT PIMCO Total Return Bond Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .25% of the average daily net assets of the
Portfolio.
8
AMERICAN SKANDIA MASTER TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services,
Incorporated (the "Investment Manager") and J.P. Morgan Investment Management,
Inc. (the "Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Master Trust (the "Trust") is a Delaware business
trust organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Trust will serve, at least initially, as an investment vehicle for
other parties, including other open-end investment companies (or series of such
companies) registered under the ICA; and
WHEREAS, certain series of American Skandia Advisor Funds, Inc. (the "Feeder
Fund"), an open-end management investment company established under the laws of
the state of Maryland, currently invest all of their respective investable
assets in corresponding portfolios of the Trust; and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Trustees of the Trust (the "Trustees") have engaged the
Investment Manager to act as investment manager for the ASMT JPM Money Market
Portfolio (the "Portfolio"), one series of the Trust, under the terms of a
management agreement, dated June 1, 1997, with the Trust (the "Management
Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Trustees have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Portfolio conforming to the investment
objective, investment policies and restrictions of the Portfolio as set forth in
the Registration Statement of the Trust as in effect from time to time (the
"Registration Statement"), the Agreement and Declaration of Trust and By-laws of
the Trust, and any investment guidelines or other instructions received by the
Sub-Adviser in writing from the Investment Manager from time to time. Any
amendments to the foregoing documents will not be deemed effective with respect
to the Sub-Adviser until the Sub-Adviser's receipt thereof. The appropriate
officers and employees of the Sub-Adviser will be available to consult with the
Investment Manager, the Trust and Trustees at reasonable times and upon
reasonable notice concerning the business of the Trust, including valuations of
securities which are not registered for public sale, not traded on any
securities market or otherwise may be deemed illiquid for purposes of the ICA;
provided it is understood that the Sub-Adviser is not responsible for daily
pricing of the Portfolio's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Trustees, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Portfolio or otherwise represented
in the Portfolio's investment portfolio from time to time and, subject to the
provisions of paragraph 3 of this Agreement, 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-Adviser
designated by the Sub-Adviser 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-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Portfolio or the Portfolio's shareholders the information required to be
provided by the Sub-Adviser hereunder. Any records maintained hereunder shall be
the property of the Portfolio and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Portfolio to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Agreement and Declaration of Trust and By-laws of the Trust; (v) policies and
determinations of the Trust and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Portfolio, as set out in the
Registration Statement in effect, or as such investment policies and
restrictions from time to time may be amended by the Portfolio's shareholders or
the Trustees and communicated to the Sub-Adviser in writing; (vii) the
Registration Statement; and (viii) investment guidelines or other instructions
received in writing from the Investment Manager. Notwithstanding the foregoing,
the Sub-Adviser shall have no responsibility to monitor compliance with
limitations or restrictions for which information from the Investment Manager or
its authorized agents is required to enable the Sub-Adviser to monitor
compliance with such limitations or restrictions unless such information is
provided to the Sub-adviser in writing. The Sub-Adviser 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-advisers to provide investment advice and other
services to the Portfolio or to series or portfolios of the Trust for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Portfolio or such other
series or portfolios.
The Sub-Adviser shall not be responsible for the preparation or filing
of any reports required of the Portfolio by any governmental or regulatory
agency, except as expressly agreed to in writing.
2. Investment Advisory Facilities. The Sub-Adviser, at its expense, will
furnish all necessary investment facilities, including salaries of personnel,
required for it to execute its duties hereunder.
3. Execution of Portfolio Transactions. In connection with the investment and
reinvestment of the assets of the Portfolio, the Sub-Adviser is responsible for
the selection of broker-dealers to execute purchase and sale transactions for
the Portfolio in conformity with the policy regarding brokerage as set forth in
the Registration Statement or as the Trustees may determine from time to time,
as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Portfolio investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
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. Subject to such policies and procedures
as the Trustees may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Portfolio through broker-dealers (including, to
the extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Portfolio to pay any such broker-dealers 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-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Portfolio and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Portfolio to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the
Sub-Adviser may also consider the sale of interests in the Portfolio, or may
consider or follow recommendations of the Investment Manager that take such
sales into account, as factors in the selection of broker-dealers to effect the
Portfolio's investment transactions. Notwithstanding the above, nothing shall
require the Sub-Adviser to use a broker-dealer which provides research services
or to use a particular broker-dealer which the Investment Manager has
recommended
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Portfolio, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Portfolio or
discuss the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Portfolio to be inspected and audited by the
Trust, the Investment Manager or their respective agents at all reasonable times
during normal business hours upon reasonable notice. The Sub-Adviser shall
immediately notify both the Investment Manager and the Trust of any legal
process served upon it in connection with its activities hereunder, including
any legal process served upon it on behalf of the Investment Manager, the
Portfolio or the Trust. The Sub-Adviser shall promptly notify the Investment
Manager of any changes in any information regarding the Sub-Adviser or the
investment program for the Portfolio as described in Section 9 of this
Agreement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. 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.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Portfolio shall be valued as set forth in the Registration Statement. If
this Agreement is terminated, the payment described herein shall be prorated to
the date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser 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 the Investment Manager, the Portfolio or the
Trust. Except as otherwise specifically provided herein, the Investment Manager,
the Portfolio and the Trust will not be obligated to pay any expenses of the
Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Agreement and Declaration of Trust of the Trust, as in effect on
the date hereof;
(b) The By-laws of the Trust, as in effect on the date hereof;
(c) The resolutions of the Trustees approving the engagement of the
Sub-Adviser as portfolio manager of the Portfolio and approving the form of this
Agreement;
(d) The resolutions of the Trustees selecting the Investment Manager as
investment manager to the Portfolio and approving the form of the Management
Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Trust and of the Investment Manager, as in
effect on the date hereof; and
(g) A list of companies the securities of which are not to be bought or
sold for the Portfolio.
The Investment Manager will furnish the Sub-Adviser 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 become 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. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have authorized
to give written and/or oral instructions to Custodians of Trust assets for the
Portfolio; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date hereof.
The Sub-Adviser 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 will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser 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. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Portfolio, is to be regarded
as confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) 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; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser 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-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser 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.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Trust, the Portfolio, the Portfolio's shareholders or
the Investment Manager for any act or omission resulting in any loss suffered by
the Trust, the Portfolio, the Portfolio's shareholders or the Investment Manager
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 or limitation
of any rights which the Trust, the Portfolio or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Portfolio. The
Investment Manager further acknowledges that the Sub-Adviser shall be in all
respects free to take action with respect to investments in securities or other
interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Portfolio. The Investment Manager
understands that the Sub-Adviser shall not favor or disfavor any of the
Sub-Adviser's clients or class of clients in the allocation of investment
opportunities, so that to the extent practical, such opportunities will be
allocated among the Sub-Adviser's clients over a period of time on a fair and
equitable basis. Nothing in this Agreement shall impose upon the Sub-Adviser any
obligation (i) to purchase or sell, or recommend for purchase or sale, for the
Portfolio any security which the Sub-Adviser, its partners, affiliates or
employees may purchase or sell for the Sub-Adviser or such partner's,
affiliate's or employee's own accounts or for the account of any other client of
the Sub-Adviser, advisory or otherwise, or (ii) to abstain from the purchase or
sale of any security for the Sub-Adviser's other clients, advisory or otherwise,
which the Investment Manager has placed on the list provided pursuant to
paragraph 6(g) of this Agreement.
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 Trustees 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 the Sub-Adviser upon 60 days written notice, and will automatically
terminate in the event of (i) its "assignment" by either party to this
Agreement, as such term is defined in the ICA, subject to such exemptions as may
be granted by the Securities and Exchange Commission by rule, regulation or
order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Portfolio (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the
Custodian. The Sub-adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Portfolio or the
Trust to amend or supplement the Trust's or the Feeder Fund's prospectus to
reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA,
the Securities Act of 1933, as amended (the "1933 Act") or any other applicable
statute, law, rule or regulation, as a result of such change; provided, however,
that the Sub-Adviser shall not be responsible for such costs and expenses where
the change in Portfolio Manager(s) reflects the termination of employment of the
Portfolio Manager(s) with the Sub-Adviser and its affiliates or is a result of a
request by the Investment Manager or is due to other circumstances beyond the
Sub-Adviser's control.
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 recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: Thomas M. Mazzaferro
President & Chief Operating Officer
Sub-Adviser: J.P. Morgan Investment Management, Inc.
522 Fifth Avenue
New York, New York 10036
Attention: Paul Brignola
Trust: American Skandia Master Trust
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Investment Manager or such affiliated person or
controlling person of the Investment Manager may become subject under the 1933
Act, the ICA, the Advisers Act, under any other statute, law, rule or
regulation, at common law or otherwise, arising out of the Sub-Adviser's
responsibilities hereunder (1) to the extent of and as a result of the willful
misconduct, bad faith, or gross negligence by the Sub-Adviser, any of the
Sub-Adviser's employees or representatives or any affiliate of or any person
acting on behalf of the Sub-Adviser, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 and in conformity with
written information furnished by the Sub-Adviser to the Investment Manager, the
Portfolio, the Trust or any affiliated person of the Investment Manager, the
Portfolio or the Trust or upon verbal information confirmed by the Sub-Adviser
in writing, or (3) to the extent of, and as a result of, the failure of the
Sub-Adviser to execute, or cause to be executed, portfolio investment
transactions according to the requirements of the ICA; provided, however, that
in no case is the Sub-Adviser's indemnity in favor of the Investment Manager or
any affiliated person or controlling person of the 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 the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the 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 the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including 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 other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser 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. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be
governed by and construed in accordance with, the laws of the State of
Connecticut.
18. Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement is held to be illegal or made
invalid by court decision, statute, rule or otherwise, such illegality or
invalidity will not affect the validity or enforceability of the remainder of
this Agreement.
The effective date of this agreement is June 1, 1997.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ----------------------------------- -----------------------------------
Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
18622-1 (06/97)
<PAGE>
American Skandia Master Trust
ASMT JPM Money Market Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .15% of the portion of the average daily net assets
of the Portfolio not in excess of $500 million; plus .09% of the portion over
$500 million but not in excess of $1 billion; plus .06% of the portion over $1
billion.
PLACEMENT AGENCY AGREEMENT
AMERICAN SKANDIA MASTER TRUST
Ugland House
P.O. Box 309
South Church Street
George Town, Grand Cayman
Cayman Islands, BWI
May ___, 1997
American Skandia Marketing, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, AMERICAN SKANDIA MASTER TRUST, a Delaware business
trust (the "Fund") consisting of the series named on Schedule 1 hereto, as such
Schedule may be revised from time to time (each, a "Series"), has agreed that
you shall be, for the period of this Agreement, the exclusive placement agent
for shares of beneficial interest of each Series.
1. You will act as agent for the private placement of shares
of each Series covered by, and in accordance with, the most recent registration
statement filed by the Fund under the Investment Company Act of 1940, as
amended, and will transmit promptly any orders received by you for purchase or
redemption of shares of a Series to the Transfer and Dividend Disbursing Agent
for the Fund of which the Fund has notified you in writing. All orders from you
shall be subject to acceptance and confirmation by the Fund.
2. You shall act as exclusive placement agent for each Series'
shares in compliance with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted pursuant to the
Investment Company Act of 1940, as amended, by the Securities and Exchange
Commission or any securities association registered under the Securities
Exchange Act of 1934, as amended. In so acting, you will offer and sell the
shares of each Series in a manner that is exempt from the registration
requirements of the Securities Act of 1933, as amended.
3. Whenever in their judgment such action is warranted by
market, economic or political conditions, or by abnormal circumstances of any
kind, the Fund's officers may decline to accept any orders for, or make any
sales of, any of the Series' shares until such time
NC152113.3
<PAGE>
as they deem it advisable to accept such orders and to make such sales and the
Fund shall advise you promptly of such determination.
4. Ownership of Series shares sold hereunder shall be
registered in such names and denominations as are specified in writing to the
Fund or to its agent designated for the purpose. No certificates for shares of
the Series will be issued.
5. The Fund agrees to pay all expenses in connection with
maintaining facilities for the issue and transfer of the Series' shares and for
supplying information, prices and other data to be furnished by the Fund
hereunder, and all expenses in connection with preparing and printing the Fund's
registration statement for regulatory purposes and for distribution to
shareholders; provided, however, that nothing contained herein shall be deemed
to require the Fund to pay any of the costs of advertising the sale of the
Series' shares. You shall pay all other expenses incurred by you in connection
with the sale of the Series' shares as contemplated in this agreement.
6. All shares offered for sale and sold by you shall be
offered for sale and sold by you to investors at the price per share (the
"offering price," which is the net asset value per share) specified and
determined as provided in the prospectus relating to the offering of relevant
Series' shares for sale. If the offering price is not an exact multiple of one
cent, it shall be adjusted to the nearest full cent. The Fund shall determine
and furnish promptly to you a statement of the offering price at least once on
each day on which the prospectus states the Fund is required to determine the
relevant Series' net asset value for the purpose of pricing purchase orders.
Each offering price shall become effective at the time and shall remain in
effect during the period specified in the statement. Each such statement shall
show the basis of its computation. For purposes of establishing the offering
price, the Fund shall consider a purchase order to have been presented to it at
the time it was originally entered by you for transmission to it, provided the
original purchase order and your fulfilling order to the Fund are appropriately
time stamped or evidenced to show the time of original entry and that your
fulfilling order to the Fund is received by the Fund within a time deemed by it
to be reasonable after the purchase order was originally entered. Purchases of
shares shall be made for full and fractional shares, carried to the third
decimal place.
7. The Fund shall furnish you from time to time, for use in
connection with the sale of the Series' shares, such information with respect to
the Fund and the Series' shares as you may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such information, when so
signed by the Fund's officers, shall be true and correct. The Fund also shall
furnish you with copies of its reports to shareholders and such additional
information regarding a Series' financial condition as you may reasonably
request from time to time.
8. The Fund represents to you that all registration statements
filed by the Fund with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, with respect to the Series' shares
have been carefully prepared in conformity with the requirements of said Act and
rules and regulations of the Securities and Exchange Commission thereunder. As
used in this agreement the terms "registration statement" shall mean
NC152113.3
2
<PAGE>
any registration statement filed with the Securities and Exchange Commission and
any amendments and supplements thereto which at any time shall have been filed
with said Commission. The Fund represents and warrants to you that any
registration statement will contain, when filed, all statements required to be
stated therein in conformity with said Act and the rules and regulations of said
Commission; that all statements of fact contained in any such registration
statement will be true and correct when such registration statement is filed;
and that any registration statement when such registration statement is filed
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Fund may but shall not be obligated to propose from
time to time such amendment or amendments to any registration statement as, in
the light of future developments, may, in the opinion of the Fund's counsel, be
necessary or advisable. If the Fund shall not propose such amendment or
amendments and/or supplement or supplements within fifteen days after receipt by
the Fund of a written request from you to do so, you may, at your option,
terminate this agreement or decline to make offers of the Series' securities
until such amendments are made. The Fund shall not file any amendment to any
registration statement without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement shall in any way
limit the Fund's right to file at any time such amendments to any registration
statement, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
9. The Fund authorizes you to use the registration statement
in the form furnished to you from time to time, in connection with the sale of
the Series' shares. The Fund agrees to indemnify, defend and hold you, your
several officers and directors, and any person who controls you within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which you,
your officers and directors, or any such controlling person, may incur under the
Securities Act of 1933, as amended, or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement or arising out of or based
upon any omission, or alleged omission, to state a material fact required to be
stated in any registration statement necessary to make the statements therein
not misleading; provided, however, that the Fund's agreement to indemnify you,
your officers or directors, and any such controlling person shall not be deemed
to cover any demands, liabilities or expenses arising out of any untrue
statement or alleged untrue statement or omission or alleged omission made in
any registration statement in reliance upon and in conformity with written
information furnished to the Fund by you specifically for use in the preparation
thereof. The Fund's agreement to indemnify you, your officers and directors, and
any such controlling person, as aforesaid, is expressly conditioned upon the
Fund's being notified of any action brought against you, your officers or
directors, or any such controlling person, such notification to be given by
letter or by telegram addressed to the Fund at its address set forth above
within ten days after the summons or other first legal process shall have been
served. The failure so to notify the Fund of any such action shall not relieve
the Fund from any liability which the Fund may have to the person against whom
such action is brought by reason of any such untrue, or alleged untrue,
statement or omission, or alleged omission, otherwise than on account of the
Fund's indemnity
NC152113.3
3
<PAGE>
agreement contained in this paragraph 9. The Fund will be entitled to assume the
defense of any suit brought to enforce any such claim, demand or liability, but,
in such case, such defense shall be conducted by counsel of good standing chosen
by the Fund and approved by you. In the event the Fund elects to assume the
defense of any such suit and retain counsel of good standing approved by you,
the defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but in case the Fund does not elect
to assume the defense of any such suit, or in case you do not approve of counsel
chosen by the Fund, the Fund will reimburse you, your officers and directors, or
the controlling person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or them. The Fund's
indemnification agreement contained in this paragraph 9 and the Fund's
representations and warranties in this agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and shall survive
the delivery of any of the Series' shares. This agreement of indemnity will
inure exclusively to your benefit, to the benefit of your several officers and
directors, and their respective estates, and to the benefit of any controlling
persons and their successors. The Fund agrees promptly to notify you of the
commencement of nay litigation or proceedings against the Fund or any of its
officers or Board members in connection with the issue and sale of any of the
Series' shares.
10. You agree to indemnify, defend and hold the Fund, its
several officers and Board members, and any person who controls the Fund within
the meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Fund, its officers or Board members, or any such controlling person, may incur
under the Securities Act of 1933, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting from such claims
or demands, shall arise out of or be based upon any untrue, or alleged untrue,
statement of a material fact contained in information furnished in writing by
you to the Fund specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration statement, or shall
arise out of or be based upon any omission, or alleged omission, to state a
material fact in connection with such information furnished in writing by you to
the Fund and required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the Fund, its officers
and Board members, and any such controlling person, as aforesaid, is expressly
conditioned upon your being notified of any action brought against the Fund, its
officers or Board members, or any such controlling person, such notification to
be given by letter or telegram addressed to you at your address set forth above
within ten days after the summons or other first legal process shall have been
served. You shall have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such action is based
solely upon such alleged misstatement or omission on your part, and in any other
event the Fund, its officers or Board members or such controlling person shall
each have the right to participate in the defense or preparation of the defense
of any such action. The failure so to notify you of any such action shall not
relieve you from any liability which you may have to the Fund, its officers or
Board members, or to such controlling person by reason of any such untrue, or
alleged untrue, statement or omission, or alleged omission, otherwise than on
account of your indemnity
NC152113.3
4
<PAGE>
agreement contained in this paragraph 10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's officers and
Board members, and their respective estates, and to the benefit of any
controlling persons and their successors. You agree promptly to notify the Fund
of the commencement of any litigation or proceedings against you or any of your
officers or directors in connection with the issue and sale of any of the
Series' shares.
11. None of the Series' shares shall be offered by either you
or the Fund under any of the provisions of this agreement and no orders for the
purchase or sale of such shares hereunder shall be accepted by the Fund if and
so long as the effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the Investment Company Act of 1940, as amended; provided, however, that nothing
contained in this paragraph 11 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase any of the Series' shares
from any shareholder in accordance with the provisions of the Fund's charter
documents.
12. The Fund agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange
commission for amendments to the registration statement then
filed or for additional information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending the
effectiveness of the registration statement then filed or the
initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue
any statement of a material fact made in the registration
statement then filed or which requires the making of a change
in such registration statement in order to make the statements
therein not misleading; and
(d) of all actions of the Securities and Exchange
Commission with respect to any amendments to any registration
statement which may from time to time be filed with the
Securities and Exchange Commission.
13. Insofar as they concern the Fund, the Fund shall comply
with all applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules or regulations made or adopted pursuant
to the Securities Act of 1933, as amended, the Investment Company Act of 1940,
as amended, or by any securities association registered under the Securities
Exchange Act of 1934, as amended.
14. You may, if you desire and at your own cost and expense,
appoint or employ agents to assist you in carrying out your obligations under
this agreement, but no such appointment or employment shall relieve you of any
of your responsibilities or obligations to the Fund under this agreement.
NC152113.3
5
<PAGE>
15. As to each Series, subject to the provisions of paragraph
8, this agreement shall continue until the date set forth opposite such Series'
name on Schedule 1 hereto (the "Reapproval Date"), and thereafter shall continue
automatically for successive annual periods ending on the day of each year set
forth opposite such Series' name on Schedule 1 hereto (the "Reapproval Day"),
provided such continuance is specifically approved at least annually by (i) the
Fund's Board or (ii) vote of a majority (as defined in the Investment Company
Act of 1940, as amended) of the Fund's outstanding voting securities, provided
that in either event its continuance also is approved by a majority of the
Fund's Board members who are not "interested persons" (as defined in said Act)
of any party to this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. As to each Series, this agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by vote
of holders of a majority of such Series' shares or, upon not less than 90 days'
notice, by you. This agreement also will terminate automatically, as to the
relevant Series, in the event of its assignment (as defined in said Act).
16. This agreement has been executed on behalf of the Fund by
the undersigned officer of the Fund in his capacity as an officer of the Fund.
The obligations of this agreement shall only be binding upon the assets and
property of the relevant Series, as provided for in the Fund's charter
documents, and shall not be binding upon any Board member, officer or
shareholder of the Fund or Series individually.
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding agreement between us.
Very truly yours,
AMERICAN SKANDIA MASTER TRUST
By:
ACCEPTED:
AMERICAN SKANDIA MARKETING, INCORPORATED
By: _____________________________________
amermas2.cus
CUSTODIAN SERVICES AGREEMENT
THIS AGREEMENT is made as of May __, 1997 by and between PNC BANK,
NATIONAL ASSOCIATION, a national banking association ("PNC Bank"), and AMERICAN
SKANDIA MASTER TRUST, a Delaware business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PNC Bank to provide custodian
services to its investment portfolios listed on Exhibit A attached hereto and
made a part hereof, as such Exhibit A may be amended from time to time (each a
"Portfolio"), and PNC Bank wishes to furnish domestic custodian services, either
directly or through an affiliate or affiliates, as more fully described herein.
NOW, THEREFORE, In consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions. As Used in This Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
<PAGE>
24
(c) "Authorized Person" means any officer of the Fund and any
other person duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and listed on the
Authorized Persons Appendix attached hereto and made a part hereof or any
amendment thereto as may be received by PNC Bank. An Authorized Person's scope
of authority may be limited by the Fund by setting forth such limitation in the
Authorized Persons Appendix.
(d) "Book-Entry System" means Federal Reserve Treasury
book-entry system for United States and federal agency securities, its successor
or successors, and its nominee or nominees and any book-entry system maintained
by an exchange registered with the SEC or otherwise under the 1934 Act.
(e) "CEA" means the Commodities Exchange Act, as amended.
(f) "Oral Instructions" mean oral instructions received by PNC
Bank from an Authorized Person or from a person reasonably believed by PNC Bank
to be an Authorized Person. (g) "PNC Bank" means PNC Bank, National Association
or a subsidiary or affiliate of PNC Bank, National Association.
(h) "SEC" means the Securities and Exchange Commission.
(i) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and the
CEA.
(j) "Shares" mean the shares of beneficial interest of any series or class
of the Fund.
(k) "Property" means: (i) any and all domestic securities and other
investment items which the Fund may from time to time deposit, or cause to be
deposited, with PNC Bank or which PNC Bank may from time to time hold for the
Fund; (ii) all income in respect of any of such securities or other investment
items;
(iii) all proceeds of the sale of any of such securities or investment
items; and
<PAGE>
(iv) all proceeds of the sale of securities
issued by the Fund, which are received by
PNC Bank from time to time, from or on
behalf of the Fund.
(k) "Written Instructions" mean written instructions signed by two
Authorized Persons and received by PNC Bank. The instructions may be delivered
by hand, mail, tested telegram, cable, telex or facsimile sending device. 2.
Appointment. The Fund hereby appoints PNC Bank to provide domestic custodian
services to the Fund, on behalf of each Portfolio, and PNC Bank accepts such
appointment and agrees to furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PNC Bank with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Board of Trustees, approving the appointment of PNC Bank or its affiliates to
provide services;
(b) a copy of the Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement;
(d) a copy of the distribution agreement with respect to each class of
Shares;
(e) a copy of each Portfolio's administration agreement if PNC Bank is not
providing the Portfolio with such services;
(f) copies of any shareholder servicing agreements made in respect of the
Fund or a Portfolio; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
<PAGE>
4. Compliance with Laws.
PNC Bank undertakes to comply with all applicable requirements of the
Securities Laws and any other laws, rules and regulations of state and federal
governmental authorities having jurisdiction with respect to the duties to be
performed by PNC Bank hereunder. Except as specifically set forth herein, PNC
Bank assumes no responsibility for such compliance by the Fund or any Portfolio.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PNC Bank
shall act only upon Oral Instructions and Written Instructions.
(b) PNC Bank shall be entitled to rely upon any Oral
Instructions and Written Instructions it receives from an Authorized Person (or
from a person reasonably believed by PNC Bank to be an Authorized Person)
pursuant to this Agreement. PNC Bank may assume that any Oral Instructions or
Written Instructions received hereunder are not in any way inconsistent with the
provisions of organizational documents of the Fund or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's shareholders, unless
and until PNC Bank receives Written Instructions to the contrary.
<PAGE>
(c) The Fund agrees to forward to PNC Bank Written
Instructions confirming Oral Instructions (except where such Oral Instructions
are given by PNC Bank or its affiliates) so that PNC Bank receives the Written
Instructions by the close of business on the same day that such Oral
Instructions are received. The fact that such confirming Written Instructions
are not received by PNC Bank shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions. Where
Oral Instructions or Written Instructions reasonably appear to have been
received from an Authorized Person, PNC Bank shall incur no liability to the
Fund in acting upon such Oral Instructions or Written Instructions provided that
PNC Bank's actions comply with the other provisions of this Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PNC Bank is in doubt as to any
action it should or should not take, PNC Bank may request directions or advice,
including Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PNC Bank shall be in doubt as to any
question of law pertaining to any action it should or should not take, PNC Bank
may request advice at its own cost from such counsel of its own choosing (who
may be counsel for the Fund, the Fund's investment adviser or PNC Bank, at the
option of PNC Bank).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral Instructions or Written Instructions PNC Bank
receives from the Fund, and the advice it receives from counsel, PNC Bank shall
be entitled to rely upon and follow the advice of counsel.
<PAGE>
(d) Protection of PNC Bank. PNC Bank shall be protected in any
action it takes or does not take in reliance upon directions, advice or Oral
Instructions or Written Instructions it receives from the Fund or from counsel
and which PNC Bank believes, in good faith, to be consistent with those
directions, advice or Oral Instructions or Written Instructions. Nothing in this
section shall be construed so as to impose an obligation upon PNC Bank (i) to
seek such directions, advice or Oral Instructions or Written Instructions, or
(ii) to act in accordance with such directions, advice or Oral Instructions or
Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PNC Bank's properly taking or not taking
such action. Nothing in this subsection shall excuse PNC Bank when an action or
omission on the part of PNC Bank constitutes willful misfeasance, bad faith,
gross negligence or reckless disregard by PNC Bank of any duties, obligations or
responsibilities set forth in this Agreement.
7. Records; Visits. The books and records pertaining to the Fund and
any Portfolio, which are in the possession or under the control of PNC Bank,
shall be the property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities laws,
rules and regulations. The Fund and Authorized Persons shall have access to such
books and records at all times during PNC Bank's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided by PNC Bank to the Fund or to an authorized representative of the Fund,
at the Fund's expense.
8. Confidentiality. PNC Bank agrees to keep confidential all records of
the Fund and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in writing, by
the Fund. The Fund agrees that such consent shall not be unreasonably withheld
and may not be withheld where PNC Bank may be exposed to civil or criminal
contempt proceedings or when required to divulge such information or records to
duly constituted authorities.
9. Cooperation with Accountants. PNC Bank shall cooperate with the
Fund's independent public accountants and shall take all reasonable action in
the performance of its obligations under this Agreement to ensure that the
necessary information is made available to such accountants for the expression
of their opinion, as required by the Fund.
<PAGE>
10. Disaster Recovery. PNC Bank shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PNC Bank shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PNC Bank shall have no liability with respect to
the loss of data or service interruptions caused by equipment failure provided
such loss or interruption is not caused by PNC Bank's own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties or obligations
under this Agreement.
11. Compensation. As compensation for custody services rendered by PNC
Bank during the term of this Agreement, the Fund, on behalf of each of the
Portfolios, will pay to PNC Bank a fee or fees as may be agreed to in writing
from time to time by the Fund and PNC Bank.
12. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PNC Bank and its affiliates from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the Securities Laws and any state and foreign
securities and blue sky laws, and amendments thereto, and expenses, including
(without limitation) attorneys' fees and disbursements, arising directly or
indirectly from any action or omission to act which PNC Bank takes (i) at the
request or on the direction of or in reliance on the advice of the Fund or (ii)
upon Oral Instructions or Written Instructions. Neither PNC Bank, nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such liability) arising out of PNC Bank's or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties
under this Agreement.
<PAGE>
13. Responsibility of PNC Bank.
(a) PNC Bank shall be under no duty to take any action on
behalf of the Fund or any Portfolio except as specifically set forth herein or
as may be specifically agreed to by PNC Bank in writing. PNC Bank shall be
obligated to exercise care and diligence in the performance of its duties
hereunder, to act in good faith and to use its best efforts, within reasonable
limits, in performing services provided for under this Agreement. PNC Bank shall
be liable for any damages arising out of PNC Bank's failure to perform its
duties under this agreement to the extent such damages arise out of PNC Bank's
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties under this Agreement.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PNC Bank shall not be under any duty or
obligation to inquire into and shall not be liable for (A) the validity or
invalidity or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement, and which PNC Bank reasonably believes to be
genuine; or (B) subject to section 10, delays or errors or loss of data
occurring by reason of circumstances beyond PNC Bank's control, including acts
of civil or military authority, national emergencies, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails, transportation,
communication or power supply.
<PAGE>
(c) Notwithstanding anything in this Agreement to the contrary,
neither PNC Bank nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages which the
Fund may incur or suffer by or as a consequence of PNC Bank's or its affiliates'
performance of the services provided hereunder, whether or not the likelihood of
such losses or damages was known by PNC Bank or its affiliates.
14. Description of Services.
(a) Delivery of the Property. The Fund will deliver or arrange for
delivery to PNC Bank, all the Property owned by the Portfolios, including cash
received as a result of the distribution of Shares, during the period that is
set forth in this Agreement. PNC Bank will not be responsible for any assets
until actual receipt.
(b) Receipt and Disbursement of Money. PNC Bank, acting upon
Written Instructions, shall open and maintain separate accounts in the Fund's
name using all cash received from or for the account of the Fund, subject to the
terms of this Agreement. In addition, upon Written Instructions, PNC Bank shall
open separate custodial accounts for each separate Portfolio of the Fund
(collectively, the "Accounts") and shall hold in the Accounts all cash received
from or for the Accounts of the Fund specifically designated to each separate
Portfolio.
PNC Bank shall make cash payments from or for the Accounts of a
Portfolio only for:
(i) purchases of domestic securities in the name of a Portfolio or PNC Bank
or PNC Bank's nominee as provided in sub-section (j) and for which PNC Bank has
received a copy of the broker's or dealer's confirmation or payee's invoice, as
appropriate;
(ii) purchase or redemption of Shares of the Fund delivered to PNC Bank;
(iii) payment of, subject to Written Instructions,
interest, taxes, administration, accounting,
distribution, advisory, management fees or similar
expenses which are to be borne by a Portfolio;
<PAGE>
(iv) payment to, subject to receipt of Written
Instructions, the Fund's transfer agent, as agent for
the shareholders, an amount equal to the amount of
dividends and distributions stated in the Written
Instructions to be distributed in cash by the
transfer agent to shareholders, or, in lieu of paying
the Fund's transfer agent, PNC Bank may arrange for
the direct payment of cash dividends and
distributions to shareholders in accordance with
procedures mutually agreed upon from time to time by
and among the Fund, PNC Bank and the Fund's transfer
agent.
(v) payments, upon receipt Written Instructions, in
connection with the conversion, exchange or surrender
of domestic securities owned or subscribed to by the
Fund and held by or delivered to PNC Bank;
(vi) payments of the amounts of dividends received with respect to domestic
securities sold short;
(vii) payments made to a sub-custodian pursuant to provisions in
sub-section (c) of this Section; and
(viii) payments, upon Written Instructions, made for other proper Fund
purposes.
PNC Bank is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received as custodian for the Accounts.
(c) Receipt of Securities; Subcustodians.
(i) PNC Bank shall hold all securities received by it for the Accounts in a
separate account that physically segregates such securities from those of any
other persons, firms or corporations, except for securities held in a Book-Entry
System. All such securities shall be held or disposed of only upon Written
Instructions of the Fund pursuant to the terms of this Agreement. PNC Bank shall
have no power or authority to assign, hypothecate, pledge or otherwise dispose
of any such securities or investment, except upon the express terms of this
Agreement and upon Written Instructions, accompanied by a certified resolution
of the Fund's Board of Trustees, authorizing the transaction. In no case may any
member of the Fund's Board of Trustees, or any officer, employee or agent of the
Fund withdraw any securities.
<PAGE>
At PNC Bank's own expense and for its own
convenience, PNC Bank may enter into
sub-custodian agreements with other United
States banks or trust companies to perform
duties described in this sub-section (c).
Such bank or trust company shall have an
aggregate capital, surplus and undivided
profits, according to its last published
report, of at least one million dollars
($1,000,000), if it is a subsidiary or
affiliate of PNC Bank, or at least twenty
million dollars ($20,000,000) if such bank
or trust company is not a subsidiary or
affiliate of PNC Bank. In addition, such
bank or trust company must be qualified to
act as custodian and agree to comply with
the relevant provisions of the 1940 Act and
other applicable rules and regulations. Any
such arrangement will not be entered into
without prior written notice to the Fund.
PNC Bank shall remain responsible for the performance of all of its duties
as described in this Agreement and shall hold the Fund and each Portfolio
harmless from its own acts or omissions, under the standards of care provided
for herein, or the acts and omissions of any sub-custodian chosen by PNC Bank
under the terms of this sub-section (c).
(d) Transactions Requiring
Instructions. Upon receipt of Oral Instructions or Written Instructions and not
otherwise, PNC Bank, directly or through the use of the Book-Entry System,
shall:
(i) deliver any domestic securities held for a Portfolio against the
receipt of payment for the sale of such securities;
(ii) execute and deliver to such persons as may be
designated in such Oral Instructions or Written
Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of a
Portfolio as owner of any domestic securities may be
exercised;
(iii) deliver any domestic securities to the issuer
thereof, or its agent, when such securities are
called, redeemed, retired or otherwise become
payable; provided that, in any such case, the cash or
other consideration is to be delivered to PNC Bank;
<PAGE>
(iv) deliver any domestic securities held for a Portfolio
against receipt of other domestic securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, tender offer, merger,
consolidation or recapitalization of any corporation,
or the exercise of any conversion privilege;
(v) deliver any domestic securities held for a Portfolio
to any protective committee, reorganization committee
or other person in connection with the
reorganization, refinancing, merger, consolidation,
recapitalization or sale of assets of any
corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be
issued to it to evidence such delivery;
(vi) make such transfer or exchanges of the assets of the
Portfolios and take such other steps as shall be
stated in said Oral Instructions or Written
Instructions to be for the purpose of effectuating a
duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the
Fund;
(vii) release domestic securities belonging to a Portfolio to any bank or
trust company for the purpose of a pledge or hypothecation to secure any loan
incurred by the Fund on behalf of that Portfolio; provided, however, that such
securities shall be released only upon payment to PNC Bank of the monies
borrowed, except that in cases where additional collateral is required to secure
a borrowing already made subject to proper prior authorization, further such
securities may be released for that purpose; and repay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(viii) release and deliver domestic securities owned by a
Portfolio in connection with any repurchase agreement
entered into on behalf of the Fund, but only on
receipt of payment therefor; and pay out moneys of
the Fund in connection with such repurchase
agreements, but only upon the delivery of such
securities;
(ix) release and deliver or exchange domestic securities
owned by the Fund in connection with any conversion
of such securities, pursuant to their terms, into
other domestic securities;
(x) release and deliver domestic securities owned by the Fund for the
purpose of redeeming in kind shares of the Fund upon delivery thereof to PNC
Bank; and
<PAGE>
(xi) release and deliver or exchange domestic securities owned by the Fund
for other corporate purposes.
PNC Bank must also receive a certified resolution
describing the nature of the corporate purpose and
the name and address of the person(s) to whom
delivery shall be made when such action is pursuant
to sub-paragraph d.
(e) Use of Book-Entry System. The Fund shall deliver to PNC
Bank certified resolutions of the Fund's Board of Trustees approving,
authorizing and instructing PNC Bank on a continuous basis, to deposit in the
Book-Entry System all domestic securities belonging to the Portfolios eligible
for deposit therein and to utilize the Book-Entry System to the extent possible
in connection with settlements of purchases and sales of domestic securities by
the Portfolios, and deliveries and returns of domestic securities loaned,
subject to repurchase agreements or used as collateral in connection with
borrowings. PNC Bank shall continue to perform such duties until it receives
Written Instructions or Oral Instructions authorizing contrary actions.
PNC Bank shall administer the Book-Entry System as follows:
(i) With respect to securities of each Portfolio which
are maintained in the Book-Entry System, the records
of PNC Bank shall identify by Book-Entry or otherwise
those securities belonging to each Portfolio. PNC
Bank shall furnish to the Fund a detailed statement
of the Property held for each Portfolio under this
Agreement at least monthly and from time to time and
upon written request.
(ii) Securities and any cash of each Portfolio deposited
in the Book-Entry System will at all times be
segregated from any assets and cash controlled by PNC
Bank in other than a fiduciary or custodian capacity
but may be commingled with other assets held in such
capacities. PNC Bank and its sub-custodian, if any,
will pay out money only upon receipt of domestic
securities and will deliver securities only upon the
receipt of money.
<PAGE>
(iii) All books and records maintained by PNC Bank which
relate to the Fund's participation in the Book-Entry
System will at all times during PNC Bank's regular
business hours be open to the inspection of
Authorized Persons, and PNC Bank will furnish to the
Fund all information in respect of the services
rendered as it may require.
PNC Bank will also provide the Fund with such reports on its own system
of internal control as the Fund may reasonably request from time to time.
(f) Registration of Securities. All domestic securities held
for a Portfolio which are issued or issuable only in bearer form, except such
securities held in the Book-Entry System, shall be held by PNC Bank in bearer
form; all other domestic securities held for a Portfolio may be registered in
the name of the Fund on behalf of that Portfolio, PNC Bank, the Book-Entry
System, a sub-custodian, or any duly appointed nominees of the Fund, PNC Bank,
Book-Entry System or sub-custodian. The Fund reserves the right to instruct PNC
Bank as to the method of registration and safekeeping of the securities of the
Fund. The Fund agrees to furnish to PNC Bank appropriate instruments to enable
PNC Bank to hold or deliver in proper form for transfer, or to register in the
name of its nominee or in the name of the Book-Entry System, any domestic
securities which it may hold for the Accounts and which may from time to time be
registered in the name of the Fund on behalf of a Portfolio.
<PAGE>
(g) Voting and Other Action. Neither PNC Bank nor its nominee
shall vote any of the securities held pursuant to this Agreement by or for the
account of a Portfolio, except in accordance with Written Instructions. PNC
Bank, directly or through the use of the Book-Entry System, shall execute in
blank and promptly deliver all notices, proxies and proxy soliciting materials
to the registered holder of such securities. If the registered holder is not the
Fund on behalf of a Portfolio, then Written Instructions or Oral Instructions
must designate the person who owns such securities.
(h) Transactions Not Requiring Instructions. In the absence of contrary
Written Instructions, PNC Bank is authorized to take the following actions:
(i) Collection of Income and Other Payments.
(A) collect and receive for the account
of each Portfolio, all income,
dividends, distributions, coupons,
option premiums, other payments and
similar items, included or to be
included in the Property, and, in
addition, promptly advise each
Portfolio of such receipt and credit
such income, as collected, to each
Portfolio's custodian account;
(B) endorse and deposit for collection, in the name of the Fund, checks,
drafts, or other orders for the payment of money;
(C) receive and hold for the account of
each Portfolio all domestic
securities received as a
distribution on the Portfolio's
securities as a result of a stock
dividend, share split-up or
reorganization, recapitalization,
readjustment or other rearrangement
or distribution of rights or similar
domestic securities issued with
respect to any securities belonging
to a Portfolio and held by PNC Bank
hereunder;
(D) present for payment and collect the
amount payable upon all securities
held hereunder which may mature or
be called, redeemed, or retired, or
otherwise become payable on the date
such securities become payable; and
(E) take any action which may be
necessary and proper in connection
with the collection and receipt of
such income and other payments and
the endorsement for collection of
checks, drafts, and other negotiable
instruments.
<PAGE>
(ii) Miscellaneous Transactions.
(A) PNC Bank is authorized to deliver or cause
to be delivered Property against payment or
other consideration or written receipt
therefor in the following cases:
(1) for examination by a broker or dealer selling for the account of a
Portfolio in accordance with street delivery custom;
(2) for the exchange of interim receipts or temporary domestic securities
for definitive domestic securities; and
(3) for transfer of domestic
securities into the name of
the Fund on behalf of a
Portfolio or PNC Bank or
nominee of either, or for
exchange of domestic
securities for a different
number of bonds,
certificates, or other
evidence, representing the
same aggregate face amount
or number of units bearing
the same interest rate,
maturity date and call
provisions, if any;
provided that, in any such
case, the new domestic
securities are to be
delivered to PNC Bank.
(B) Unless and until PNC Bank receives Oral Instructions or Written
Instructions to the contrary, PNC Bank shall:
(1) pay all income items held by it which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of each Portfolio;
(2) collect interest and cash dividends received on Property, with notice
to the Fund, to the account of each Portfolio;
(3) hold for the account of
each Portfolio all stock
dividends, rights and
similar domestic securities
issued with respect to any
domestic securities held by
PNC Bank; and
<PAGE>
(4) execute as agent on behalf
of the Fund all necessary
ownership certificates
required by the Internal
Revenue Code or the Income
Tax Regulations of the
United States Treasury
Department or under the
laws of any state now or
hereafter in effect,
inserting the Fund's name,
on behalf of a Portfolio,
on such certificate as the
owner of the securities
covered thereby which are
held hereunder, to the
extent it may lawfully do
so.
(i) Segregated Accounts.
(i) PNC Bank shall upon receipt of Written
Instructions or Oral Instructions establish
and maintain a segregated accounts on its
records for and on behalf of each Portfolio.
Such accounts may be used to transfer cash
and securities held hereunder, including
securities in the Book-Entry System:
(A) for the purposes of compliance by
the Fund with the procedures
required by a securities or option
exchange, providing such procedures
comply with the 1940 Act and any
releases of the SEC relating to the
maintenance of segregated accounts
by registered investment companies;
and
(B) Upon receipt of Written
Instructions, for other proper
corporate purposes.
(ii) PNC Bank shall arrange for the establishment of IRA
custodian accounts for such shareholders holding
Shares through IRA accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of
1986, as amended (including regulations promulgated
thereunder), and with such other procedures as are
mutually agreed upon from time to time by and among
the Fund, PNC Bank and the Fund's transfer agent.
(j) Purchases of Securities. PNC Bank shall settle purchased domestic
securities upon receipt of Oral Instructions or Written Instructions from the
Fund or its investment advisers that specify:
(i) the name of the issuer and the title of the securities, including CUSIP
number if applicable;
<PAGE>
(ii) the number of shares or the principal amount purchased and accrued
interest, if any;
(iii) the date of purchase and settlement;
(iv) the purchase price per unit;
(v) the total amount payable upon such purchase;
(vi) the Portfolio involved; and
(vii) the name of the person from whom or the
broker through whom the purchase was made.
PNC Bank shall upon receipt of such
securities purchased by or for a Portfolio
pay out of the moneys held for the account
of the Portfolio the total amount payable to
the person from whom or the broker through
whom the purchase was made, provided that
the same conforms to the total amount
payable as set forth in such Oral
Instructions or Written Instructions.
(k) Sales of Securities. PNC Bank shall settle sold securities
held hereunder upon receipt of Oral Instructions or Written Instructions from
the Fund that specify:
(i) the name of the issuer and the title of the security, including CUSIP
number if applicable;
(ii) the number of shares or principal amount
sold, and accrued interest, if any;
(iii) the date of trade and settlement;
(iv) the sale price per unit;
(v) the total amount payable to the Fund upon such sale;
(vi) the name of the broker through whom or the person to whom the sale was
made; and
(vii) the location to which the security must be delivered and delivery
deadline, if any; and
<PAGE>
(viii) the Portfolio involved.
PNC Bank shall deliver the securities upon receipt of the total amount
payable to the Portfolio upon such sale, provided that the total amount payable
is the same as was set forth in the Oral Instructions or Written Instructions.
Subject to the foregoing, PNC Bank may accept payment in such form as shall be
satisfactory to it, and may deliver securities and arrange for payment in
accordance with the customs prevailing among dealers in securities.
(l) Reports; Proxy Materials.
(i) PNC Bank shall furnish to the Fund the following reports: (A) such
periodic and special reports as the Fund may reasonably request;
(B) a monthly statement summarizing all
transactions and entries for the
account of each Portfolio, listing
the portfolio securities belonging
to each Portfolio with the adjusted
average cost of each issue and the
market value at the end of such
month and stating the cash account
of each Portfolio including
disbursements;
(C) the reports required to be furnished to the Fund pursuant to Rule
17f-4; and
(D) such other information as may be agreed upon from time to time between
the Fund and PNC Bank.
(ii) PNC Bank shall transmit promptly to the Fund
any proxy statement, proxy material, notice
of a call or conversion or similar
communication received by it as custodian of
the Property. PNC Bank shall be under no
other obligation to inform the Fund as to
such actions or events.
<PAGE>
(m) Collections. All collections of monies or other property
in respect, or which are to become part, of the Property (but not the
safekeeping thereof upon receipt by PNC Bank) shall be at the sole risk of the
Fund. If payment is not received by PNC Bank within a reasonable time after
proper demands have been made, PNC Bank shall notify the Fund as promptly as
reasonably possible in writing, including copies of all demand letters, any
written responses and memoranda of all oral responses, and shall await
instructions from the Fund. PNC Bank shall not be obliged to take legal action
for collection unless and until reasonably indemnified to its satisfaction. PNC
Bank shall also notify the Fund as soon as reasonably practicable whenever
income due on securities held hereunder is not collected in due course and shall
provide the Fund with periodic status reports of such income collected after a
reasonable time.
15. Duration and Termination. This Agreement shall continue until
terminated by the Fund or by PNC Bank on sixty (60) days' prior written notice
to the other party. In the event this Agreement is terminated (pending
appointment of a successor to PNC Bank or vote of the shareholders of the Fund
to dissolve or to function without a custodian of its cash, securities or other
property), PNC Bank shall not deliver cash, securities or other property of the
Portfolios to the Fund. It may deliver them to a bank or trust company of PNC
Bank's choice, having an aggregate capital, surplus and undivided profits, as
shown by its last published report, of not less than twenty million dollars
($20,000,000), as a custodian for the Fund to be held under terms similar to
those of this Agreement. PNC Bank shall not be required to make any such
delivery or payment until full payment shall have been made to PNC Bank of all
of its fees, compensation, costs and expenses. PNC Bank shall have a security
interest in and shall have a right of setoff against the Property as security
for the payment of such fees, compensation, costs and expenses.
<PAGE>
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notice shall be addressed (a) if to PNC Bank at
Airport Business Center, International Court 2, 200 Stevens Drive, Lester,
Pennsylvania 19113, marked for the attention of the Custodian Services
Department (or its successor) (b) if to the Fund, at the address of the Fund or
(c) if to neither of the foregoing, at such other address as shall have been
given by like notice to the sender of any such notice or other communication by
the other party. If notice is sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately. If
notice is sent by first-class mail, it shall be deemed to have been given five
days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered.
17. Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation; Assignment. PNC Bank may assign its rights and delegate
its duties hereunder to any wholly-owned direct or indirect subsidiary of PNC
Bank, National Association or PNC Bank Corp., provided that (i) PNC Bank gives
the Fund thirty (30) days' prior written notice; (ii) the delegate (or assignee)
agrees with PNC Bank and the Fund to comply with all relevant provisions of the
1940 Act; and (iii) PNC Bank and such delegate (or assignee) promptly provide
such information as the Fund may request, and respond to such questions as the
Fund may ask, relative to the delegation (or assignment), including (without
limitation) the capabilities of the delegate (or assignee).
<PAGE>
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous.
(a) Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate documents their agreement,
if any, with respect to delegated duties and Oral Instructions.
(b) Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(c) Governing Law. This Agreement shall be deemed to be a contract made in
Pennsylvania and governed by Pennsylvania law, without regard to principles of
conflicts of law.
(d) Partial Invalidity. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
<PAGE>
(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such party.
(g) Declaration of Trust. The parties to this Agreement
acknowledge and agree that all liabilities arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, including without
limitation, liabilities arising in connection with any agreement of the Fund set
forth herein to indemnify any party to this Agreement or any other person, shall
be satisfied out of the assets of the Fund and that no Trustee, officer or
shareholder of the Fund shall be personally liable for any of the foregoing
liabilities. The Fund's Declaration of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of the State of Delaware. Such
Declaration of Trust describes the limitations of liability of the Trustees and
officers of the Fund as required under the 1940 Act.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PNC BANK, NATIONAL ASSOCIATION
By:
Title:
AMERICAN SKANDIA MASTER TRUST
By:
Title:
<PAGE>
25
EXHIBIT A
THIS EXHIBIT A, dated as of May __, 1997, is Exhibit A to that certain
Custodian Services Agreement dated as of May __, 1997 between PNC Bank, National
Association and American Skandia Master Trust.
PORTFOLIOS
Skandia Janus Captial Growth Fund
Skandia INVESCO Equity Income Fund
Skandia PIMCO Total Return Bond Fund
Skandia J.P. Mogran Money Market Fund
<PAGE>
26
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
CUSTODY AGREEMENT
This Custody Agreement is dated May __, 1997 between MORGAN
STANLEY TRUST COMPANY, a New York State chartered trust company (the
"Custodian"), and AMERICAN SKANDIA MASTER TRUST, a Delaware business trust on
behalf of each of the Funds listed on Appendix 1, as may be amended from time to
time (the "Client").
1. Appointment and Acceptance; Accounts. (a) The Client hereby
appoints the Custodian as a custodian of Property (as defined below) owned or
under the control of the Client that are delivered to the Custodian, or any
Subcustodian as appointed below, from time to time to be held in custody for the
benefit of the Client. The Custodian agrees to act as such custodian upon the
terms and conditions hereinafter provided.
(b) Prior to the delivery of any Property by the Client to the
Custodian, the Client shall deliver to the Custodian each document and other
item listed in Appendix 2. In addition, the Client shall deliver to the
Custodian any additional documents or items as the Custodian may deem necessary
for the performance of its duties under this Agreement.
(c) The Client instructs the Custodian to establish on the
books and records of the Custodian the accounts listed in Appendix 3 (the
"Accounts") in the name of the Client. Upon receipt of Authorized Instructions
(as defined below) and appropriate documentation, the Custodian shall open
additional Accounts for the Client. Upon the Custodian's confirmation to the
Client of the opening of such additional Accounts, or of the closing of
Accounts, Appendix 3 shall be deemed automatically amended or supplemented
accordingly. The Custodian shall record in the Accounts and shall have general
responsibility for the safekeeping of all securities ("Securities"), cash, cash
equivalents and other property (all such Securities, cash, cash equivalents and
other property being collectively the "Property") of the Client that are
delivered to the Custodian for custody.
(d) The procedures the Custodian and the Client will use in
performing activities in connection with this Agreement are set forth in a
client services guide provided to the Client by the Custodian, as such guide may
be amended from time to time by the Custodian by written notice to the Client
(the "Client Services Guide").
2. Subcustodians. The Property may be held in custody and
deposit accounts that have been established by the Custodian with one or more
domestic or foreign banks or other institutions as listed on Exhibit A (the
"Subcustodians"), as such Exhibit may be amended from time to time by the
Custodian by 60 days prior written notice to the Client, or through the
facilities of one or more securities depositories or clearing agencies, as may
be changed by prior written notice forwarded by the Custodian as soon as
reasonably practicable upon the Custodian's receipt and verification of such
change. The Custodian shall hold Property through a Subcustodian, securities
depository or clearing agency only if (a) such Subcustodian and any securities
depository or clearing agency in which such Subcustodian or the Custodian holds
Property, or any of their creditors, may not assert any right, charge, security
interest, lien, encumbrance or other claim of any kind to the Securities except
a claim of payment for its safe custody or administration and (b) beneficial
ownership of such Property may be freely transferred without the payment of
money or value other than for safe custody or administration. Any Subcustodian
may hold Property in a securities depository and may utilize a clearing agency.
3. Records. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its customers
with a Subcustodian in a single account identified as belonging to the
Custodian for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging to the Client
any Property held by a Subcustodian for the Custodian's account;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any other property held by the
Subcustodian other than property of the Custodian's customers held
solely for the benefit of customers of the Custodian; and
(d) In the event the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian shall be
required by its agreement with the Custodian to identify on its books
such Property as being held for the account of the Custodian as
custodian for its customers or in such other manner as is required by
local law or market practice.
4. Access to Records. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's affairs. The Custodian shall
also obtain from any Subcustodian (and shall require each Subcustodian to use
reasonable efforts to obtain from any securities depository or clearing agency
in which it deposits Property) an undertaking, to the extent consistent with
local practice and the laws of the jurisdiction or jurisdictions to which such
Subcustodian, securities depository or clearing agency is subject, to permit
independent public accountants such reasonable access to the records of such
Subcustodian, securities depository or clearing agency as may be reasonably
required in connection with the examination of the Client's affairs or to take
such other action as the Custodian in its judgment may deem sufficient to ensure
such reasonable access.
5. Reports. The Custodian shall provide such reports and other information
to the Client and to such persons as the Client directs as the Custodian and the
Client may agree from time to time.
6. Payment of Monies. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
The Custodian may act as the Client's agent or act as a
principal in foreign exchange transactions at such rates as are agreed from time
to time between the Client and the Custodian.
7. Transfer of Securities. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. Corporate Action. (a) The Custodian shall notify the Client of details
of all corporate actions affecting the Client's Securities promptly upon its
receipt of such information.
(b) The Custodian shall take, or cause any Subcustodian to
take, such corporate action only in accordance with Authorized Instructions or
as provided in this Section 8 or Section 9.
(c) In the event the Client does not provide timely Authorized
Instructions to the Custodian, the Custodian shall act in accordance with the
default option provided by local market practice and/or the issuer of the
Securities.
(d) Fractional shares resulting from corporate action activity
shall be treated in accordance with local market practices.
9. General Authority. In the absence of Authorized Instructions to the
contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for expenses of handling
Property or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to
the Client;
(b) receive and collect all income and principal with respect to Securities
and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of interim
receipts or temporary securities for securities in definitive form and
the exchange of warrants, or other documents of entitlement to
securities, for the securities themselves);
(d) surrender Securities at maturity or when called for redemption upon
receiving payment therefor;
(e) execute in the Client's name such ownership and other certificates as
may be required to obtain the payment of income from Securities;
(f) pay or cause to be paid, from the Accounts, any and all
taxes and levies in the nature of taxes imposed on Property by any
governmental authority in connection with custody of and transactions
in such Property;
(g) endorse for collection, in the name of the Client, checks, drafts and
other negotiable instruments;
(h) take non-discretionary action on mandatory corporate actions; and
(i) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and other
dealings with the Property.
10. Authorized Instructions; Authorized Persons. (a) Except as
otherwise provided in Sections 6 through 9, 13 and 17, all payments of monies,
all transfers, exchanges or deliveries of Property and all responses to
corporate actions shall be made or taken only upon receipt by the Custodian of
Authorized Instructions; provided that such Authorized Instructions are timely
received by the Custodian. "Authorized Instructions" of the Client means
instructions from an Authorized Person received by telecopy, tested telex,
electronic link or other electronic means or by such other means as may be
agreed in writing between the Client and the Custodian.
(b) "Authorized Person" means each of the persons or entities
identified on Appendix 4 as amended from time to time by written notice from the
Client to the Custodian. The Client represents and warrants to the Custodian
that each Authorized Person listed in Appendix 4, as amended from time to time,
is authorized to issue Authorized Instructions on behalf of the Client. Prior to
the delivery of the Property to the Custodian, the Custodian shall provide a
list of designated system user ID numbers and passwords that the Client shall be
responsible for assigning to Authorized Persons. The Custodian shall assume that
an electronic transmission received and identified by a system user ID number
and password was sent by an Authorized Person. The Custodian agrees to provide
additional designated system user ID numbers and passwords as needed by the
Client. The Client authorizes the Custodian to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Custodian to the Client, Appendix 4
shall be deemed automatically amended accordingly. The Client authorizes the
Custodian to receive, act and rely upon any Authorized Instructions received by
the Custodian which have been issued, or purport to have been issued, by an
Authorized Person.
(c) Any Authorized Person may cancel/correct or otherwise
amend any Authorized Instruction received by the Custodian, but the Client
agrees to indemnify the Custodian for any liability, loss or expense incurred by
the Custodian and its Subcustodians as a result of their having relied upon or
acted on any prior Authorized Instruction. An amendment or cancellation of an
Authorized Instruction to deliver or receive any security or funds in connection
with a trade will not be processed once the trade has settled.
11. Registration of Securities. (a) In the absence of
Authorized Instructions to the contrary, Securities which must be held in
registered form shall be registered in the name of the Custodian or the
Custodian's nominee or, in the case of Securities in the custody of an entity
other than the Custodian, in the name of the Custodian, its Subcustodian or any
such entity's nominee. The Custodian may, without notice to the Client, cause
any Securities to be registered or re-registered in the name of the Client.
(b) Where the Custodian has been instructed by the Client to
hold any Securities in the name of any person or entity other than the
Custodian, its Subcustodian or any such entity's nominee, the Custodian shall
not be responsible for any failure to collect such dividends or other income or
participate in any such corporate action with respect to such Securities.
12. Deposit Accounts. All cash received by the Custodian for
the Accounts shall be held by the Custodian as a short-term credit balance in
favor of the Client and, if the Custodian and the Client have agreed in writing
in advance that such credit balances shall bear interest, the Client shall earn
interest at the rates and times as agreed between the Custodian and the Client.
The Client acknowledges that any such credit balances shall not be accompanied
by the benefit of any governmental insurance.
13. Short-term Credit Extensions. (a) From time to time, the
Custodian may extend or arrange short-term credit for the Client which is (i)
necessary in connection with payment and clearance of securities and foreign
exchange transactions or (ii) pursuant to an agreed schedule, as and if set
forth in the Client Services Guide, of credits for dividends and interest
payments on Securities. All such extensions of credit shall be repayable by the
Client on demand.
(b) The Custodian shall be entitled to charge the Client
interest for any such credit extension at rates to be agreed upon from time to
time or, if such credit is arranged by the Custodian with a third party on
behalf of the Client, the Client shall reimburse the Custodian for any interest
charge. In addition to any other remedies available, the Custodian shall be
entitled to a right of set-off against the Property then held in the Account or
Accounts of that Fund to which credit has been extended to satisfy the repayment
of such credit extensions and the payment of, or reimbursement for, accrued
interest thereon.
14. Representations and Warranties. (a) The Client represents
and warrants that (i) the execution, delivery and performance of this Agreement
(including, without limitation, the ability to obtain the short-term extensions
of credit in accordance with Section 13) are within the Client's power and
authority and have been duly authorized by all requisite action (corporate or
otherwise) of the Client and of the beneficial owner of the Property, if other
than the Client, and (ii) this Agreement and each extension of short-term credit
extended to or arranged for the benefit of the Client in accordance with Section
13 shall at all times constitute a legal, valid and binding obligation of the
Client enforceable against the Client in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights in general and subject to the
effect of general principles of equity (regardless of whether considered in a
proceeding in equity or at law).
(b) The Custodian represents and warrants that (i) the
execution, delivery and performance of this Agreement are within the Custodian's
power and authority and have been duly authorized by all requisite action
(corporate or otherwise) of the Custodian and (ii) this Agreement constitutes
the legal, valid and binding obligation of the Custodian enforceable against the
Custodian in accordance with its terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
15. Standard of Care; Indemnification. (a) The Custodian shall
be responsible for the performance of only such duties as are set forth in this
Agreement or contained in Authorized Instructions given to the Custodian which
are not contrary to the provisions of any relevant law or regulation. The
Custodian shall be liable to the Client for any loss, liability or expense
incurred by the Client in connection with this Agreement to the extent that any
such loss, liability or expense results from the negligence or willful
misconduct of the Custodian or any Subcustodian; provided, however that neither
the Custodian nor any Subcustodian shall be liable to the Client for any
indirect, special or consequential damages.
(b) The Client acknowledges that the Property may be
physically held outside the United States. The Custodian shall not be liable for
any loss, liability or expense resulting from events beyond the reasonable
control of the Custodian, including, but not limited to, force majeure.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for, and hold each of them harmless from, any
liability, loss or expense (including attorneys' fees and disbursements)
incurred in connection with this Agreement, including without limitation, (i) as
a result of the Custodian having acted or relied upon any Authorized
Instructions or (ii) arising out of any such person acting as a nominee or
holder of record of Securities.
16. Fees; Liens. (a) The Client shall pay to the Custodian
from time to time such compensation for its services pursuant to this Agreement
as may be mutually agreed upon as well as the Custodian's out-of-pocket and
incidental expenses. The Client shall hold the Custodian harmless from any
liability or loss resulting from any taxes or other governmental charges, and
any expenses related thereto, which may be imposed or assessed with respect to
the Accounts or any Property held therein. The Custodian is, and any
Subcustodians are, authorized to charge the Accounts for such items. The
Custodian and each Subcustodian shall notify the Client of any such charges
made.
(b) The Custodian shall have a lien, charge and security
interest on any and all Property held in an Account or Accounts by a Fund for
any amount owing to the Custodian in respect of such Account from time to time
under this Agreement.
17. Termination. This Agreement may be terminated by the
Client or the Custodian by 90 days written notice to the other, sent by
registered mail. If notice of termination is given, the Client shall, within 60
days following the giving of such notice, deliver to the Custodian a statement
in writing specifying the successor custodian or other person to whom the
Custodian shall transfer the Property. In either event, the Custodian, subject
to the satisfaction of any lien it may have, shall transfer the Property to the
person so specified. If the Custodian does not receive such statement the
Custodian, at its election, may transfer the Property to a bank or trust company
established under the laws of the United States or any state thereof to be held
and disposed of pursuant to the provisions of this Agreement or may continue to
hold the Property until such a statement is delivered to the Custodian. In such
event the Custodian shall be entitled to fair compensation for its services
during such period as the Custodian remains in possession of any Property and
the provisions of this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect; provided, however, that the
Custodian shall have no obligation to settle any transactions in Securities for
the Accounts. The provisions of Sections 15 and 16 shall survive termination of
this Agreement.
18. Investment Advice. The Custodian shall not supervise, recommend or
advise the Client relative to the investment, purchase, sale, retention or other
disposition of any Property held under this Agreement.
19. Confidentiality. (a) The Custodian, its agents and
employees shall maintain the confidentiality of information concerning the
Property held in the Client's account, including in dealings with affiliates of
the Custodian. In the event the Custodian or any Subcustodian is requested or
required to disclose any confidential information concerning the Property, the
Custodian shall, to the extent practicable and legally permissible, promptly
notify the Client of such request or requirement so that the Client may seek a
protective order or waive any objection to the Custodian's or such
Subcustodian's compliance with this Section 19. In the absence of such a waiver,
if the Custodian or such Subcustodian is compelled, in the opinion of its
counsel, to disclose any confidential information, the Custodian or such
Subcustodian may disclose such information to such persons as, in the opinion of
counsel, is so required.
(b) The Client shall maintain the confidentiality of, and not
provide to any third parties absent the written permission of the Custodian, any
computer software, hardware or communications facilities made available to the
Client or its agents by the Custodian.
20. Notices. Any notice or other communication from the Client
to the Custodian, unless otherwise provided by this Agreement or the Client
Services Guide, shall be sent by certified or registered mail to Morgan Stanley
Trust Company, One Pierrepont Plaza, Brooklyn, New York, 11201, Attention:
President, and any notice from the Custodian to the Client is to be mailed
postage prepaid, addressed to the Client at the address appearing below, or as
it may hereafter be changed on the Custodian's records in accordance with
written notice from the Client.
21. Assignment. This contract may not be assigned by either party without
the prior written
approval of the other.
22. Miscellaneous. (a) This Agreement shall bind the successors and assigns
of the Client and the Custodian.
(b) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to its
conflicts of law rules and to the extent not preempted by federal law. The
Custodian and the Client hereby irrevocably submit to the exclusive jurisdiction
of any New York State court or any United States District Court located in the
State of New York in any action or proceeding arising out of this Agreement and
hereby irrevocably waive any objection to the venue of any such action or
proceeding brought in any such court or any defense of an inconvenient forum.
In witness whereof, the parties hereto have set their hands as
of the date first above written.
AMERICAN SKANDIA MASTER
TRUST, on behalf of each of the Funds
By______________________
Name:
Title:
Address for record: _________________________
-------------------------
-------------------------
Accepted:
MORGAN STANLEY TRUST COMPANY
By___________________________
Authorized Signature
<PAGE>
APPENDIX 1
List of Funds
<PAGE>
APPENDIX 2
Account Documentation
REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX
RECLAIMS):
CUSTODY AGREEMENT
CLIENT SERVICES GUIDE (INCLUDING APPENDICES)
FEE SCHEDULE / BILLING GUIDE
GENERAL ACCOUNT INFORMATION
US TAX AUTHORITY DOCUMENTATION
LOCAL TAX OFFICE LETTER / APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FORM 6166 / REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX
STATUS AND TAX IDS
TAX RECLAIM POWER OF ATTORNEY
PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)
UK TAX AUTHORITY DOCUMENTATION
SOPHISTICATED INVESTOR (ACCREDITED INVESTOR) LETTER
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
<PAGE>
DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT
BY ITS LOCAL TAX AUTHORITY:
UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)
UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FOREIGN EXEMPTION LETTERS / APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL USE THE PROXY VOTING
SERVICE:
VOTING POWER OF ATTORNEY
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
JGB INDEMNIFICATION LETTER
KOREAN SECURITIES POWER OF ATTORNEY
NEW ZEALAND 'APPROVED ISSUER LEVY' LETTER
SPANISH POWER OF ATTORNEY WITH APOSTILE
<PAGE>
APPENDIX 3
Client Accounts
Account Name Account Number Account Mnemonic
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
<PAGE>
APPENDIX 4
Part I - Authorized Signatures
<TABLE>
<CAPTION>
The Custodian is directed to accept and act upon Authorized Instructions
received from any of the following persons or entities:
<S> <C> <C> <C> <C>
Telephone/ Authorized
Name Organization Title Fax
Signature
</TABLE>
Authorized by: ___________________________
<PAGE>
Part II - System User ID numbers
The Custodian is directed to accept and act upon Authorized Instructions
transmitted electronically and identified with the following mnemonics and
system user ID numbers for the following activities:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Work Station Account Workstation Sessions
User I.D. Mnemonic Number TE TCC SL FE CM MA TD
- --------- -------- ------ -- --- -- -- -- -- --
</TABLE>
Workstation Session Codes
TE Trade Entry
TCC Trade Cancel/Correct
SL Securities Lending
FE Foreign Exchange
CM Cash Movement
MA Mass Authorization
TD Time Deposit
<PAGE>
EXHIBIT A
Subcustodians
amermas2.adm
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of May __, 1997 by and between AMERICAN
SKANDIA MASTER TRUST, a Delaware business trust (the "Fund"), and PFPC
INTERNATIONAL LTD., a company incorporated under the law of Ireland ("PFPC"),
which is an indirect wholly owned subsidiary of PNC Bank Corp.
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide administration and
accounting services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof, as such Exhibit A may be amended from time to
time (each a "Portfolio"), and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound hereby the parties
hereto agree as follows:
1. Definitions. As Used in this Agreement:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's Board of Trustees to give Oral Instructions and
Written Instructions on behalf of the Fund and listed on the Authorized Persons
Appendix attached hereto and made a part hereof or any amendment thereto as may
be received by PFPC. An Authorized Person's scope of
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<PAGE>
authority may be limited by the Fund by setting forth such limitation in the
Authorized Persons Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Oral Instructions" mean oral instructions received by
PFPC from an Authorized Person or from a person reasonably believed by PFPC to
be an Authorized Person.
(f) "SEC" means the Securities and Exchange Commission.
(g) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(h) "Shares" mean the shares of beneficial interest of any Portfolio or
class thereof of the Fund.
(i) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to provide administration and
accounting services to the each of the Portfolios, in accordance with the terms
set forth in this Agree ment. PFPC accepts such appointment and agrees to
furnish such services.
3. Delivery of Documents. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions
of the Fund's Board of Trustees, approving the
appointment of PFPC or its affiliates to provide ser
vices to each Portfolio and approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
(c) a copy of each Portfolio's advisory agreement or agreements;
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<PAGE>
(d) a copy of the distribution agreement with respect to each class of
Shares representing an interest in a Portfolio;
(e) a copy of any additional administration agreement with respect to a
Portfolio;
(f) a copy of any shareholder servicing agreement made in respect of the
Fund or a Portfolio; and
(f) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. Compliance with Rules and Regulations.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any other laws, rules and regulations of state and federal
governmental authorities having jurisdiction with respect to the duties to be
performed by PFPC hereunder. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund or any Portfolio.
5. Instructions.
(a) Unless otherwise provided in this Agreement, PFPC shall
act only upon Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions
and Written Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to this
Agreement. PFPC may assume that any Oral Instruction or Writ ten Instruction
received hereunder is not in any way inconsistent with the provisions of
organizational documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Board of Trustees or of the Fund's shareholders, unless
and until PFPC receives Written Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming Oral
3
<PAGE>
Instructions (except where such Oral Instructions are given by PFPC or its
affiliates) so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC shall in no way
invalidate the transactions or enforceability of the transactions authorized by
the Oral Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized Person, PFPC shall
incur no liability to the Fund in acting upon such Oral Instructions or Written
Instructions provided that PFPC's actions comply with the other provisions of
this Agreement.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any action
it should or should not take, PFPC may request directions or advice, including
Oral Instructions or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
question of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PFPC receives from the Fund
and the advice PFPC receives from counsel, PFPC may rely upon and follow the
advice of counsel.
(d) Protection of PFPC. PFPC shall be protected in any action it takes or
does not take in reliance upon directions, advice or Oral Instructions or
Written Instructions it receives
4
<PAGE>
from the Fund or from counsel and which PFPC believes, in good faith, to be
consistent with those directions, advice and Oral Instructions or Written
Instructions. Nothing in this section shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral Instructions or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral Instructions or Written Instructions unless, under the terms of other
provisions of this Agreement, the same is a condition of PFPC's properly taking
or not taking such action. Nothing in this subsection shall excuse PFPC when an
action or omission on the part of PFPC constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard by PFPC of any duties, obligations
or responsibilities set forth in this Agreement.
7. Records; Visits.
(a) The books and records pertaining to the Fund and the
Portfolios which are in the possession or under the control of PFPC shall be the
property of the Fund. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable Securities Laws. The Fund and
Authorized Persons shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PFPC to the Fund or to
an Authorized Person, at the Fund's expense.
(b) PFPC shall keep the following records:
(i) all books and records with respect to each Portfolio's books of
account;
(ii) records of each Portfolio's securities transactions; and
(iii) all other books and records as PFPC is required to maintain pursuant
5
<PAGE>
to Rule 31a-1 of the 1940 Act in connection with the services provided
hereunder.
8. Confidentiality. PFPC agrees to keep confidential all records of the
Fund and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in writing, by
the Fund. The Fund agrees that such consent shall not be unreasonably withheld
and may not be withheld where PFPC may be exposed to civil or criminal contempt
proceedings or when required to divulge such information or records to duly
constituted authorities.
9. Liaison with Accountants. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit-related schedules with respect to each Portfolio.
PFPC shall take all reasonable action in the performance of its duties under
this Agreement to assure that the necessary information is made available to
such accountants for the expression of their opinion, as required by the Fund.
10. Disaster Recovery. PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure, provided such
loss or interruption is not caused by PFPC's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties or obligations under this
Agreement.
6
<PAGE>
11. Compensation. As compensation for services set forth herein that are
rendered by PFPC during the term of this Agreement, the Fund, on behalf of each
Portfolio, will pay to PFPC a fee or fees as may be agreed to in writing by the
Fund and PFPC.
12. Indemnification. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC and its affiliates from all taxes, charges,
expenses, assessments, claims and liabilities (including, without limitation,
liabilities arising under the Securities Laws and any state or foreign
securities and blue sky laws, and amendments thereto), and expenses, including
(without limitation) attorneys' fees and disbursements arising directly or
indirectly from any action which PFPC takes or does not take (i) at the request
or on the direction of or in reliance on the advice of the Fund or (ii) upon
Oral Instructions or Written Instructions. Neither PFPC, nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such liability) arising out of PFPC's or its affiliates' own willful
misfeasance, bad faith, gross negligence or reckless disregard of its duties and
obligations under this Agreement. Any amounts payable by the Fund hereunder
shall be satisfied only against the relevant Portfolio's assets and not against
the assets of any other investment portfolio of the Fund.
13. Responsibility of PFPC.
(a) PFPC shall be under no duty to take any action on behalf
of the Fund or any Portfolio except as specifically set forth herein or as may
be specifically agreed to by PFPC in writing. PFPC shall be obligated to
exercise care and diligence in the performance of its duties hereunder, to act
in good faith and to use its best efforts, within reasonable limits, in
performing services provided for under this Agreement. PFPC shall be liable for
any damages arising out of PFPC's failure to
7
<PAGE>
perform its duties under this Agreement to the extent such damages arise out of
PFPC's willful misfeasance, bad faith, gross negligence or reckless disregard of
such duties.
(b) Without limiting the generality of the foregoing or of any
other provision of this Agreement, (i) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with the standard
of care set forth above; and (ii) PFPC shall not be liable for (A) the validity
or invalidity or authority or lack thereof of any Oral Instruction or Written
Instruction, notice or other instrument which conforms to the applicable
requirements of this Agreement, and which PFPC reasonably believes to be
genuine; or (B) subject to Section 10, delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
flood, catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the
contrary, neither PFPC nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages which the
Fund or any Portfolio may incur or suffer by or as a consequence of PFPC's or
any affiliates' performance of the services provided hereunder, whether or not
the likelihood of such losses or damages was known by PFPC or its affiliates.
14. Description of Accounting Services on a Continuous Basis. PFPC will
perform the following accounting services with respect to each Portfolio:
(i) Journalize investment, capital share and income and expense activities;
(ii) Verify investment buy/sell trade tickets
when received from the investment adviser
for the Portfolio (the "Adviser") and
transmit trades to the Fund's custodian (the
"Custodian") with respect to transactions in
domestic securities for proper settlement;
8
<PAGE>
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances with the Custodian, and provide
the Adviser with the beginning cash balance available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations in U.S. dollar terms;
(viii) Calculate various contractual expenses (e.g., advisory and custody
fees);
(ix) Monitor the expense accruals and notify an officer of the Fund of any
proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon Written
Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes and currency exchange rates from
independent pricing services approved by the Adviser, or if such quotes are
unavailable, then obtain such prices from the Adviser, and in either case
calculate the market value of the Portfolio's invest ments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Adviser;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average dollar-weighted
maturity;
(xvii) Prepare a monthly financial statement, which will include the
9
<PAGE>
following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses; and
(xviii) If applicable, make daily partnership income
allocations and perform daily partnership
accounting as necessitated by the
master/feeder structure of the Fund and its
feeder funds including, but not limited to,
allocations of realized and unrealized gains
and losses; and
(xix) Provide certain financial information
necessary to facilitate the preparation of
the Fund's annual U.S. federal partnership
income tax return, IRS Form 1065, including
Schedule K-1 thereto.
15. Description of Administration Services on a Continuous Basis.
PFPC will perform the following administration services with respect to
each Portfolio: (i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund statistical
data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal income, Federal
excise and state tax returns;
(v) Prepare and file the Fund's Semi-Annual Reports with the SEC on Form
N-SAR;
(vi) Prepare and file with the SEC the Fund's annual, semi-annual, and
quarterly shareholder reports;
(vii) Assist in the preparation of registration statements and other
filings
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<PAGE>
relating to the registration of Shares;
(viii) Monitor the Portfolio's status as a
regulated investment company under
Sub-chapter M of the Internal Revenue Code
of 1986, as amended;
(ix) Coordinate contractual relationships and communications between the
Fund and its contractual service providers;
(x) Monitor the Fund's compliance with the amounts and conditions of each
state qualification;
(xi) Provide such information and reports to the Adviser as shall be
mutually agreed upon by PFPC and the Adviser with respect to this Agreement to
assist the Adviser in monitoring the Fund for compliance with the terms of its
Declaration of Trust, Bi-Laws and resolutions, and any amendments thereto, and
with any representations made to U.S. regulatory authorities, and any amendments
thereto, and in monitoring the Portfolio for compliance with the investment
restrictions and investment policies set out in the most recent registration
statement of the Fund as filed with the SEC and any amendments thereto; and
(xii) Maintain the register of shareholders of the
Portfolio and enter on such register all
issues, transfers and repurchases of Shares.
16. Duration and Termination. This Agreement shall continue until
terminated by either party on sixty (60) days' prior written notice to the other
party.
17. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. If notice is sent by confirming telegram, cable, telex
or facsimile sending device, it shall be deemed to have been given immediately.
If notice is sent by first-class mail, it shall be deemed to have been given
three days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered. Notices shall be addressed
(a) if to PFPC, at 80 Harcourt Street, Dublin 2, Ireland; (b) if to the Fund, at
the address of the Fund or (c) if to neither of the foregoing, at such other
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<PAGE>
address as shall have been provided by like notice to the sender of any such
notice or other communication by the other party.
18. Amendments. This Agreement, or any term thereof, may be changed or
waived only by written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
19. Delegation; Assignment. PFPC may assign its rights and delegate its
duties hereunder to any wholly-owned direct or indirect subsidiary of PNC Bank,
National Association or PNC Bank Corp., provided that (i) PFPC gives the Fund
thirty (30) days' prior written notice; (ii) the delegate (or assignee) agrees
with PFPC and the Fund to comply with all relevant provisions of the 1940 Act;
and (iii) PFPC and such delegate (or assignee) promptly provide such information
as the Fund may request, and respond to such questions as the Fund may ask,
relative to the delegation (or assignment), including (without limitation) the
capabilities of the delegate (or assignee).
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
22. Miscellaneous. (a) Entire Agreement. This Agreement embodies the
entire agreement and understanding between the parties and supersedes all prior
agreements and understandings relating to the subject matter hereof, provided
that the parties may embody in one or more separate
12
<PAGE>
documents their agreement, if any, with respect to delegated duties and
Oral Instructions.
(b) Captions. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Ireland.
(d) Partial Invalidity. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby.
(e) Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
(f) Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such party.
(g) Declaration of Trust. The parties to this Agreement
acknowledge and agree that all liabilities arising, directly or indirectly,
under this Agreement, of any and every nature whatsoever, including without
limitation, liabilities arising in connection with any agreement of the Fund set
forth herein to indemnify any party to this Agreement or any other person, shall
be satisfied out of the assets of the Fund and that no Trustee, officer, or
shareholder of the Fund shall be personally liable for any of the foregoing
liabilities. The Fund's Declaration of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of the State of Delaware. Such
Declaration of Trust describes the limitations of liability of the Trustees and
officers of the Fund as required under the 1940 Act.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INTERNATIONAL LTD.
By:
Title:
AMERICAN SKANDIA MASTER TRUST
By:
Title:
14
<PAGE>
EXHIBIT A
THIS EXHIBIT A, dated as of May __, 1997, is Exhibit A to that certain
Administration and Accounting Services Agreement dated as of May __, 1997
between PFPC International Ltd. and American Skandia Master Trust.
PORTFOLIOS
Skandia T. Rowe Price International Equity Fund
Skandia Janus Capital Growth Fund
Skandia INVESCO Equity Income Fund
Skandia PIMCO Total Return Bond Fund
Skandia J.P. Morgan Money Market Fund
15
<PAGE>
AUTHORIZED PERSONS APPENDIX
NAME (Type) SIGNATURE
ROGERS & WELLS
Two Hundred Park Avenue
New York, NY 10166-0153
TELEPHONE (212) 878-8000
FACSIMILE (212) 878-8375
June 4, 1997
American Skandia Master Trust
Ugland House
P.O. Box 309
South Church Street
George Town, Grand Cayman
Cayman Islands, BWI
Ladies and Gentlemen:
We have acted as counsel for American Skandia Master
Trust, a Delaware business trust (the "Trust"), in connection with the
organization of the Trust, its registration as a open-end investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and the
preparation and filing with the Securities and Exchange Commission under the
1940 Act of a Registration Statement on Form N-1A (the "Registration
Statement").
In so acting, we have examined and relied upon
originals or copies, certified or otherwise identified to our satisfaction, of
such records, documents, certificates and other instruments as in our judgment
are necessary or appropriate to enable us to render the opinions expressed
below.
Based upon the foregoing, and on such examination of
law as we have deemed necessary, we are of the opinion that:
1. The Trust has been duly formed and is validly
existing in good standing under the laws of the State of Delaware.
2. When the beneficial interests of the Trust have
been offered and sold as contemplated in the Registration Statement and in
accordance with the terms of the Placement Agency Agreement, filed as an Exhibit
to the Registration Statement, the beneficial interests of the Trust will be
validly issued, fully paid and non-assessable.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ Rogers & Wells
Rogers & Wells
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion of our report dated May 28, 1997 on our audit of the
Statement of Assets and Liabilities of American Skandia Master Trust as of May
28, 1997 with respect to this Registration Statement under the Investment
Company Act of 1940 on Form N-1A.
/s/ Coopers & Lybrand
Coopers & Lybrand
Dublin, Republic of Ireland
June 3, 1997
[LETTERHEAD OF AMERICAN SKANDIA ADVISOR FUNDS, INC.]
May __, 1997
American Skandia Marketing, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Ladies & Gentlemen:
With respect to our purchase from you, for the account of
American Skandia Advisor Funds, Inc., a Maryland corporation, at the purchase
price of $50,000, representing 1000 beneficial interests (an "Initial Interest")
in each of the five series of American Skandia Master Trust (the "Trust"), we
hereby advise you that we are purchasing such Initial Interest for investment
purposes without any present intention of withdrawing or reselling.
The amount paid by the Trust on any decrease or withdrawal by
us of any portion of such Initial Interest will be reduced by a portion of any
unamortized organization expenses, determined by the portion of the amount of
such Initial Interest withdrawn to the aggregate Initial Interest of all holders
of similar Initial Interest then outstanding after taking into account any prior
withdrawals of any such Initial Interest.
Very truly yours,
AMERICAN SKANDIA ADVISOR FUNDS, INC.
By: __________________________
Name:
Title:
[LETTERHEAD OF SKANDIA ADVISOR FUNDS]
May __, 1997
American Skandia Marketing, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Ladies & Gentlemen:
With respect to our purchase from you, for the account of
Skandia Advisor Funds, a Cayman corporation, at the purchase price of $50,000,
representing 1000 beneficial interests (an "Initial Interest") in each of the
five series of American Skandia Master Trust (the "Trust"), we hereby advise you
that we are purchasing such Initial Interest for investment purposes without any
present intention of withdrawing or reselling.
The amount paid by the Trust on any decrease or withdrawal by
us of any portion of such Initial Interest will be reduced by a portion of any
unamortized organization expenses, determined by the portion of the amount of
such Initial Interest withdrawn to the aggregate Initial Interest of all holders
of similar Initial Interest then outstanding after taking into account any prior
withdrawals of any such Initial Interest.
Very truly yours,
SKANDIA ADVISOR FUNDS
By: ______________________
Name:
Title:
