Investment Company Act No. 811-5186
As filed with the Securities and Exchange Commission on January 6, 1999
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
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American Skandia Trust
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
American Skandia Life
Assurance Corporation
1 Corporate Drive
P.O. Box 883
Shelton, CT 06484-0883
Telephone (203) 926-1888
Fax (203) 929-8071
January 6, 1999
Dear Valued Customer,
As an American Skandia Life Assurance Corporation ("ASLAC") contract owner who
beneficially owns shares of the AST Marsico Capital Growth Portfolio (the
"Portfolio") of the American Skandia Trust ("AST"), you are cordially invited
to a special meeting of the shareholders of the Portfolio to be held at the
offices of ASLAC, One Corporate Drive, Shelton, CT, on February 5, 1999 at
10:30 a.m.
Shareholders of the Portfolio are being asked to approve or disapprove a
proposal to approve a new Sub-Advisory Agreement between American Skandia
Investment Services, Inc. ("ASISI") and Marsico Capital Management, LLC
("Marsico") regarding investment advice to the Portfolio. As more fully
explained in the attached Proxy Statement, because of a recent transaction
involving the ownership of Marsico, the prior Sub-Advisory Agreement between
ASISI and Marsico regarding the Portfolio terminated automatically, as a
matter of law. The new agreement will be on terms substantially identical to
the prior agreement, and approval of the proposal will in no way increase the
advisory fees, sub-advisory fees or expenses of the Portfolio or change the
level, nature or quality of services you receive.
Your vote is important no matter how large or small your holdings are. We urge
you to read the Proxy Statement thoroughly and to indicate your voting
instructions on the enclosed Proxy Card(s), date and sign it, and return it
promptly in the envelope provided to be received by American Skandia on or
before the close of business on February 3, 1999. The shares that you
beneficially own will be voted in accordance with instructions received by
that date. All shares of a Portfolio for which instructions are not received
will be voted in the same proportion as the votes cast by contract owners on
the proxy issues presented.
Any questions or concerns you may have regarding the special meetings or the
proxy should be directed to your financial representative.
Sincerely,
/s/ Gordon C. Boronow
Gordon C. Boronow
President and Deputy Chief Executive Officer
American Skandia Life Assurance Corporation
<PAGE>
AMERICAN SKANDIA TRUST
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF THE
AST MARSICO CAPITAL GROWTH PORTFOLIO
To be held
February 5, 1999
To the Shareholders of the AST Marsico Capital Growth Portfolio of American
Skandia Trust:
Notice is hereby given that a Special Meeting of Shareholders of the
AST Marsico Capital Growth Portfolio (the "Portfolio") of American Skandia Trust
(the "Trust"), will be held at One Corporate Drive, Shelton, Connecticut 06484
on February 5, 1999 at 10:30 a.m. Eastern Time, or at such adjourned time as may
be necessary for the holders of a majority of the outstanding shares of the
Portfolio to vote (the "Meeting"), for the following purposes:
I. To consider the approval of a new Sub-Advisory Agreement between
American Skandia Investment Services, Incorporated and Marsico Capital
Management, LLC.
II. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The matters referred to above are discussed in detail in the Proxy
Statement attached to this Notice. The Board of Trustees has fixed the close of
business on December 14, 1998 as the record date for determining shareholders
entitled to notice of, and to vote at, the Meeting, and only holders of record
of shares at the close of business on that date are entitled to notice of, and
to vote at, the Meeting. Each share of the Portfolio is entitled to one vote on
each proposal.
You are cordially invited to attend the Meeting. If you do not expect
to attend, you are requested to complete, date and sign the enclosed form of
proxy and return it promptly in the envelope provided for that purpose. The
enclosed proxy is being solicited on behalf of the Board of Trustees.
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER
SOLICITATION, WE URGE YOU TO INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY,
DATE AND SIGN IT, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, NO MATTER HOW
LARGE OR SMALL YOUR HOLDINGS MAY BE. YOU MAY REVOKE IT AT ANY TIME PRIOR TO ITS
USE. THEREFORE, BY APPEARING AT THE MEETING, AND REQUESTING REVOCATION PRIOR TO
THE VOTING, YOU MAY REVOKE THE PROXY AND YOU CAN THEN VOTE IN PERSON.
By order of the Board of Trustees
/s/Eric C. Freed
Eric C. Freed
Secretary
American Skandia Trust
January 6, 1999
<PAGE>
PROXY STATEMENT
AMERICAN SKANDIA TRUST
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484
SPECIAL MEETINGS OF SHAREHOLDERS OF THE
MARSICO CAPITAL GROWTH PORTFOLIO
OF
AMERICAN SKANDIA TRUST
To be held
February 5, 1999
This proxy statement and enclosed form of proxy are being furnished in
connection with the solicitation of proxies by the Board of Trustees of American
Skandia Trust (the "Trust") for use at a Special Meeting of the Shareholders of
the Marsico Capital Growth Portfolio (the "Portfolio") of the Trust to be held
at One Corporate Drive, Shelton, Connecticut 06484 on February 5, 1999, at 10:30
a.m. Eastern Time, (the "Meeting"), or at any adjournments thereof, for the
purposes set forth in the accompanying Notice of Meeting (the "Notice"). The
first mailing of proxies and proxy statements to shareholders of the Portfolio
is anticipated to be on or about January 8, 1999.
Voting instructions will be solicited principally by mailing this Proxy
Statement and its enclosures, but proxies also may be solicited by telephone,
telegraph, or in person by officers or agents of the Trust or American Skandia
Life Assurance Corporation ("ASLAC"). The Trust will forward proxy materials to
record owners for any beneficial owners that such record owners may represent.
Neither the Trust nor the Portfolio will pay any of the costs of the Meeting,
including the costs related to the solicitation of proxies.
The Annual Report of the Trust, including audited financial statements
for the fiscal year ended December 31, 1997, and the Semi-Annual Report of the
Trust (the "Reports"), have been previously sent to shareholders. The Trust will
furnish additional copies of the Reports to a shareholder upon request, without
charge, by writing to the Trust at the above address or by calling
1-800-752-6342.
Shareholders of record at the close of business on December 14, 1998
(the "Record Date") are entitled to notice of, and to vote at, the Meeting. Each
shareholder is entitled to one vote for each full share. As of the Record Date,
40,145,541 shares of beneficial interest of the Portfolio were outstanding. As
of the Record Date, there is no beneficial owner of more than 5% of the shares
of any portfolio of the Trust to the knowledge of the Trust. Collectively, the
Trustees and Officers of the Trust own less than 1% of the Trust's outstanding
shares.
Currently, the Trust serves as an underlying mutual fund for variable
annuities issued by life insurance companies, including ASLAC. As of the Record
Date, 100% of the Portfolio's shares were legally owned by ASLAC. ASLAC holds
assets attributable to its variable annuity contract obligations in ASLAC
Variable Account B (Class 1 Sub-Accounts), ASLAC Variable Account B (Class 2
Sub-Accounts) and ASLAC Variable Account B (Class 3 Sub-Accounts) (collectively,
for purposes of this Proxy Statement, "ASLAC Variable Accounts"), each of which
is an investment company registered as such under the Investment Company Act of
1940, as amended (the "Investment Company Act"). ASLAC Variable Accounts are
comprised of various sub-accounts, each of which invests exclusively in a mutual
fund or in a portfolio of a mutual fund. ASLAC will solicit voting instructions
from variable annuity contract owners who beneficially own shares of the
Portfolio represented in the Marsico Capital Growth Sub-Account as of the Record
Date (the "Contractowners"). Because Contractowners are indirectly invested in
the Portfolio through their contracts and have the right to instruct ASLAC how
to vote shares of the Portfolio on all matters requiring a shareholder vote,
Contractowners should consider themselves shareholders of the Portfolio for
purposes of this Proxy Statement.
American Skandia Investment Services, Incorporated ("ASISI") is the
investment manager for all the Trust's investment portfolios, including the
Portfolio. ASISI is a wholly-owned subsidiary of American Skandia Investment
Holding Corporation ("ASIHC"). ASIHC is also the owner of all the outstanding
shares of ASLAC and American Skandia Marketing, Incorporated ("ASM"), which is
the principal underwriter of ASLAC variable annuity contracts. The principal
offices of ASISI, ASIHC, ASLAC and ASM are located in the same building at One
Corporate Drive, Shelton, Connecticut 06484.
Under a Sub-Advisory Agreement with ASISI, Marsico Capital Management,
LLC ("Marsico Capital") serves as sub-advisor to the Portfolio and, subject to
the supervision and control of ASISI and the Board of Trustees, determines the
securities to be purchased for and sold from the Portfolio. Marsico Capital,
located at 1200 17th Street, Suite 1300, Denver, Colorado 80202, was organized
in September 1997. The Chairman and Chief Executive Officer of Marsico Capital
is Thomas F. Marsico. Mr. Marsico's address is 1200 17th Street, Suite 1300,
Denver, Colorado 80202. 100% of the voting interests of Marsico Capital
currently are owned of record by Mr. Marsico and TFM Holdings LLLP ("TFM
Holdings"). TFM is a Colorado limited liability partnership whose partners are
Mr. Marsico and certain other employees of Marsico Capital.
The Administrator of the Portfolios, and every other portfolio of the
Trust, is PFPC Inc., a Delaware corporation located at 103 Bellevue Parkway,
Wilmington, Delaware 19809.
Shareholders of the Portfolio are being asked to consider and vote on a
new sub-advisory agreement for the Portfolio. As explained in more detail below,
the existing sub-advisory agreement for the Portfolio will terminate
automatically, by operation of law, upon the consummation of a transaction (the
"Transaction") between Marsico Capital and NationsBank, N.A. ("NationsBank"), a
subsidiary of BankAmerica Corporation and a national bank organized under the
laws of the United States, in which NationsBank will acquire 50% of the voting
control of Marsico Capital. Shareholders are not being asked to approve the
Transaction; rather, they are being asked to continue the existing sub-advisory
relationship for the Portfolio under a new contract (the "New Sub-Advisory
Agreement"). The Transaction and the terms of the New Sub-Advisory Agreement are
discussed below. Other than the date of the agreement, the proposed New
Sub-Advisory Agreement is identical in terms to the present agreement.
All shares of the Portfolio held by the Contractowners will be voted by
ASLAC in accordance with voting instructions received from such Contractowners.
Proxies submitted without voting instructions will be voted FOR the proposal set
forth in the Notice. ASLAC is entitled to vote shares for which no proxy is
received and will vote such shares in the same proportion as the votes cast by
the Contractowners on the proxy issues presented. ASLAC has fixed the close of
business on February 3, 1999 as the last day on which voting instructions will
be accepted.
<PAGE>
PROPOSAL
APPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN
AMERICAN SKANDIA INVESTMENT SERVICES, INCORPORATED
AND MARSICO CAPITAL MANAGEMENT, LLC
IN CONNECTION WITH ADVISORY SERVICES PROVIDED TO THE
MARSICO CAPITAL GROWTH PORTFOLIO
Background
Since the Portfolio commenced operations on December 22, 1997, ASISI
has served as investment adviser to the Portfolio pursuant to an Investment
Management Agreement (the "Investment Management Agreement") with the Trust. The
Investment Management Agreement, effective December 22, 1997 and as renewed
thereafter, provides, among other things, that in carrying out its
responsibility to supervise and manage all aspects of the Portfolio's
operations, ASISI may engage, subject to the approval of the Board of Trustees
and, where required, the shareholders of the Portfolio, a sub-advisor to provide
advisory services in relation to the Portfolio. Under the Investment Management
Agreement, ASISI may delegate to a sub-advisor the duty, among other things, to
formulate and implement the Portfolio's investment program, including the duty
to determine what issuers and securities will be purchased for and sold from the
Portfolio. In accordance with this provision for delegation of authority, ASISI
entered into a sub-advisory agreement (the "Existing Sub-Advisory Agreement"),
effective December 22, 1997 with Marsico Capital, pursuant to which those duties
were delegated to Marsico Capital. Marsico Capital has served as sub-advisor to
the Portfolio since it commenced operations.
The Existing Sub-Advisory Agreement was initially approved by the Board
of Trustees, including a majority of the Trustees who are not "interested
persons" of the Trust (as defined under the Investment Company Act) (the
"Independent Trustees"), on May 16, 1997, and was renewed by vote of the Board
of Trustees on April 8, 1998. The Existing Sub-Advisory Agreement was not, and
was not required to be, approved by the shareholders of the Portfolio after the
Portfolio commenced operations.
The Transaction. On November 5, 1998, Thomas F. Marsico, Chairman and
Chief Executive Officer of Marsico Capital, TFM Holdings and other related
entities (the "Marsico Entities"), entered into a transaction agreement (the
"Transaction Agreement") with NationsBank pursuant to which the Marsico Entities
have agreed to sell to NationsBank (i) 100% of the ownership interest in Marsico
Management Holdings ("MMH"), a Delaware limited liability company and (ii) a 50%
ownership interest in Marsico Capital. Mr. Marsico, TFM Holdings and a trust for
the benefit of members of Mr. Marsico's family will receive $120 million in cash
in connection with the sale of such interests. Upon the closing of the
Transaction, MMH will become a wholly-owned subsidiary of NationsBank. In
addition, NationsBank expects to contribute its ownership interest in Marsico
Capital to MMH, so that Marsico Capital will be a 50%-owned subsidiary of MMH.
Following the completion of the Transaction, the Limited Liability
Company Agreement of Marsico Capital will be amended and restated ("Amended LLC
Agreement") to reflect the change in ownership of Marsico Capital. Under the
Amended LLC Agreement, Marsico Capital will be managed by a board of directors
consisting of six members, three to be appointed by TFM Holdings and three to be
appointed by NationsBank.
The names and principal occupations of the initial directors appointed
by TFM Holdings are as follows: Thomas F. Marsico, Chairman and Chief Executive
Officer of Marsico Capital; Barbara M. Japha, President of Marsico Capital; and
Christopher J. Marsico, Chief Operating Officer of Marsico Capital. The address
for each of these individuals is 1200 17th Street, Suite 1300, Denver, CO,
80202.
The names, principal occupations and addresses of the initial
NationsBank designated directors of MCM are as follows: Owen G. (Bob) Shell,
Jr., President, Wealth Management, NationsBank N.A., NationsBank Plaza, 800
Market St., St. Louis, MO, 63101-2607; Michael E. O'Neill, President, Principal
Investment and Wealth Management, BankAmerica Corp., 40th Floor, 555 California
Street, San Francisco, CA 94104; and Robert H. Gordon, Senior Vice President,
Consumer Investing Group, NationsBank N.A., and President of NationsBanc
Advisors Inc., NationsBank Plaza, 101 S. Tryon St., Charlotte, NC 28255-0001.
The Transaction is subject to a number of conditions, including the
receipt of shareholder approval of investment company portfolios for which
Marsico Capital serves in an investment advisory capacity and consent of other
of Marsico Capital's investment advisory clients representing a specified amount
of Marsico Capital's assets under management. Moreover, certain regulatory
approvals may need to be obtained prior to the consummation of the Transaction.
Shareholder approval of the New Sub-Advisory Agreement is being sought
because the Transaction will result in an "assignment" (as defined by the
Investment Company Act) of the Existing Sub-Advisory Agreement, resulting in the
Existing Sub-Advisory Agreement's automatic termination. If shareholders do not
approve the New Sub-Advisory Agreement, the Transaction may not occur because of
the condition noted above. If shareholder approval is not obtained and the
Transaction nonetheless takes place, ASISI will retain Marsico Capital or
another sub-advisor, who will be compensated as permitted by applicable law, to
serve on an interim basis until shareholder approval of a sub-advisory agreement
with a new sub-advisor can be obtained.
The Trust has been advised that the Transaction will not affect Marsico
Capital's day-to-day operations, its investment process or its portfolio
management team. Thomas F. Marsico, who has managed the Portfolio since its
inception, will continue to serve as the Chairman and Chief Executive Officer of
Marsico Capital and to manage the Portfolio following completion of the
Transaction.
NationsBank. NationsBank, a national banking association having its
principal place of business in Charlotte, North Carolina, is a subsidiary of
BankAmerica Corporation. The merger of BankAmerica Corporation and NationsBank
Corporation on September 30, 1998 resulted in the second largest banking
organization in the United States, BankAmerica Corporation, with approximately
$570 billion in assets serving approximately 30 million households, as well as
the world's largest banking group in terms of market capitalization (over $139.5
billion).
Based on Securities and Exchange Commission ("SEC") filings,
NationsBank has informed the Trust that it is not aware of any persons who, as
of September 30, 1998, either individually or as a group, beneficially owned
more than 10% of BankAmerica Corporation's outstanding voting securities.
The information set forth above concerning Marsico Capital, NationsBank
and the Transaction has been provided to the Trust by Marsico Capital.
Evaluation of the Board of Trustees
At a meeting of the Board of Trustees of American Skandia Trust held in
person on December 16, 1998, the Board of Trustees gave approval to the New
Sub-Advisory Agreement and authorized the officers of the Trust to prepare this
proxy statement. At the meeting, the terms and conditions of the New
Sub-Advisory Agreement were reviewed with the Board of Trustees and the Board of
Trustees received information concerning the Transaction and its anticipated
effect upon Marsico Capital's ability to perform its responsibilities in respect
of the Portfolio. In evaluating the New Sub-Advisory Agreement, the Board of
Trustees considered the fact that the Existing Sub-Advisory Agreement is
identical to the New Sub-Advisory Agreement (except for its effective date),
including the terms relating to the services to be provided and the fees to be
paid to Marsico Capital thereunder. The Board of Trustees considered the
performance of Marsico Capital to date in providing services to the Portfolio,
and the skills and capabilities of the personnel of Marsico Capital.
The Board of Trustees considered to be particularly important
assurances from both Marsico Capital and NationsBank that the Transaction, if
completed, will not affect the nature, quality or extent of the services that
Marsico Capital provides to the Portfolio. The Board of Trustees also considered
assurances from Marsico Capital and NationsBank that Marsico Capital would
operate separately from NationsBank with substantial autonomy, and that it was
not NationsBank's intention to attempt to influence Marsico Capital's investment
decisions. In addition, the Board of Trustees considered the facts that Thomas
F. Marsico would continue to serve as Chairman and Chief Executive Officer of
Marsico Capital and to have a significant ownership interest in Marsico Capital,
that Mr. Marsico would continue to manage the Portfolio and that appropriate
incentives will be continued to retain other members of the senior management of
Marsico Capital and to assure that Marsico Capital will continue to furnish high
quality services to the Portfolio. The Board of Trustees also considered
NationsBank's substantial resources.
Based on the Board of Trustees' review and their evaluation of the
materials they received, and in consideration of all factors deemed relevant to
them, the Board of Trustees determined that the New Sub-Advisory Agreement is in
the best interests of the Portfolio and its shareholders. Accordingly, the
Board, including all of the Independent Trustees, voted to recommend that the
Portfolio's shareholders vote to approve the New Sub-Advisory Agreement.
The New and Existing Sub-Advisory Agreement
The New Sub-Advisory Agreement, which is attached to this Proxy
Statement as Exhibit A, will become effective as of the consummation of the
Transaction, contingent upon approval by the shareholders of the Portfolio. If
the shareholders approve the New Sub-Advisory Agreement, it will remain in
effect for an initial term of one year from its effective date, and may be
renewed annually thereafter by specific approval of the Board of Trustees or the
shareholders of the Portfolio. As discussed above, all of the terms and
provisions of the New Sub-Advisory Agreement, other than its effective date, are
the same as those of the Existing Sub-Advisory Agreement. Those terms and
provisions are summarized below.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, Marsico Capital will agree to furnish the
Investment Manager with investment advisory services in connection with
continuous investment programs for the Portfolio, which are to be managed in
accordance with its investment objectives, investment policies and restrictions
as set forth in the Prospectus and Statement of Additional Information of the
Trust and in accordance with the Trust's Agreement and Declaration of Trust and
By-laws. Subject to the supervision and control of the Investment Manager, which
in turn will be subject to the supervision and control of the Board of Trustees,
Marsico Capital, in its discretion, will determine and select the securities to
be purchased for and sold from the Portfolio and place orders with and give
instructions to brokers, dealers and others to cause such transactions to be
executed.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, sub-advisory fees are payable by ASISI, not by
the Portfolio or its shareholders. For its fee, Marsico Capital will agree to
furnish at its expense all necessary investment facilities, including salaries
of personnel, required for it to execute its duties under the New Sub-Advisory
Agreement faithfully. Marsico Capital's compensation for the services provided
under the New Sub-Advisory Agreement will be computed at an annual rate and will
be payable monthly in arrears, based on the average daily net assets of the
Portfolio for each month. For all services rendered to the Portfolio, ASISI will
calculate and pay Marsico Capital at the annual rate of .45% of the Portfolio's
average daily net assets. The aggregate fee paid by ASISI to Marsico Capital for
services rendered under the Existing Sub-Advisory Agreement for the fiscal
period from commencement of operations on December 22, 1997 to December 31, 1997
was $784. The aggregate fee paid by ASISI to Marsico Capital for the period from
January 1, 1998 until September 30, 1998 was $698,676.
The New Sub-Advisory Agreement is renewable annually by specific
approval of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the Portfolio (as defined under the Investment Company
Act). Any renewal by the Board requires the approval by the vote of a majority
of the Trustees who are not interested persons under the Investment Company Act,
cast in person at a meeting called for the purpose of voting on such renewal.
The New Sub-Advisory Agreement may be terminated at any time without penalty
upon 60 days' written notice to the other party to the agreement, and will
automatically terminate in the event of its "assignment" by either party (as
defined under the Investment Company Act) or (provided Marsico Capital has
received prior written notice thereof) upon termination of the Investment
Management Agreement.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, in the absence of willful misconduct, bad
faith, gross negligence or reckless disregard by Marsico Capital of its
obligations under the New Sub-Advisory Agreement, Marsico Capital shall not be
liable to the Trust, its shareholders or ASISI for any loss suffered by the
Portfolio in connection with the services provided under the New Sub-Advisory
Agreement. The New Sub-Advisory Agreement provides, however, that the foregoing
provision does not constitute a waiver of any rights that the Company, the
Portfolio or ASISI may have under applicable law.
Information Concerning Marsico Capital
Marsico Capital provides investment advice to registered investment
companies that are distributed to retail investors as well as investment
companies that serve as funding vehicles for variable life insurance policies
and variable annuity contracts. As of September 30, 1998 Marsico Capital served
as advisor or sub-advisor to nine registered investment company portfolios.
These nine portfolios had aggregate assets of approximately $1.8 billion as of
September 30, 1998. Marsico Capital also provides investment advice to
institutions other than registered investment companies and to individuals.
The following table lists other investment companies or investment company
portfolios for which Marsico Capital acts as investment advisor or sub-advisor
that have similar investment objectives as the Portfolio, as well as the rate of
advisory and sub-advisory compensation payable to Marsico Capital and the net
assets of the fund or portfolio.
- ---------------------- --------------- -------------- --------- --------------
FUND OBJECTIVE INVESTMENT FEE RATE NET ASSETS
ADVISER AS OF
OR SEPTEMBER
SUB-ADVISOR 30, 1998
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Marsico Focus Fund Capital Growth Investment .45% $860,000,000
Advisor
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Marsico Growth & Capital Growth Investment .45% $261,000,000
Income Fund Advisor
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Nations Marsico Capital Growth Sub-Advisor .45% $184,000,000
Focused Equities Fund
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Nations Marsico Capital Growth Sub-Advisor .45% $63,000,000
Growth & Income Fund
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Nations Annuity Capital Growth Sub-Advisor .45% $14,000,000
Trust -Nations
Marsico Focused
Equities Fund
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
Nations Annuity Capital Growth Sub-Advisor .45% $10,000,000
Trust-Nations
Marsico Growth &
Income Fund
- ---------------------- --------------- -------------- --------- --------------
- ---------------------- --------------- -------------- --------- --------------
American Skandia Capital Growth Sub-Advisor .45% $25,861,787
Advisor Funds Inc. -
ASAF Marsico Capital
Growth Portfolio
- ---------------------- --------------- -------------- --------- --------------
Marsico Capital was established in September 1997 by Thomas F. Marsico and
TFM Holdings. It is a Delaware limited liability company. The principal source
of Marsico Capital's income is professional fees received from providing
continuing investment advice. Mr. Marsico is the Chairman and Chief Executive
Officer of Marsico Capital and also is President and Chief Investment Officer of
the Marsico Focus Fund and the Marsico Growth & Income Fund, registered mutual
fund portfolios. Prior to forming Marsico Capital, Mr. Marsico served as
Executive Vice President and Portfolio Manager at Janus Capital Corporation
("Janus"). Mr. Marsico joined Janus in 1986 and served as the Portfolio Manager
of the Janus Twenty Fund from January 31, 1988 through August 11, 1997 and
served in the same capacity for the Janus Growth and Income Fund from May 31,
1991 (that fund's inception) through August 11, 1997.
The Board of Directors of Marsico Capital is presently comprised of Thomas
F. Marsico, the chairman and Chief Executive Officer of Marsico Capital; Barbara
M. Japha, the President of Marsico Capital; and Christopher J. Marsico, Chief
Operating Officer of Marsico Capital.
All of the outstanding interests of Marsico Capital are held of record
by Thomas F. Marsico and TFM Holdings.
Section 15(f). The Trust has been informed by Marsico Capital and
NationsBank that they intend to comply with Section 15(f) of the Investment
Company Act. Section 15(f) provides a non-exclusive "safe harbor" for an
investment adviser or any of its affiliated persons to receive any amount or
benefit in connection with a change in control of the investment advisor as long
as two conditions are met. First, for a period of three years after the change
of control, at least 75% of the board members of the investment company must not
be "interested persons" of the adviser or the predecessor advisor. Second, an
"unfair burden" must not be imposed on the investment company as a result of the
transaction or any express or implied terms, conditions, or understandings
applicable thereto. The term "unfair burden" is defined in Section 15(f) to
include any arrangement during the two-year period after the transaction whereby
the investment advisor, or any interested person of any such advisor, receives
or is entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from, or on behalf of the
investment company (other than bona fide ordinary compensation as principal
underwriter for such investment company). None of the Trust's Board of Trustees
are interested persons of Marsico or NationsBank. In addition, the Trust has
been advised that none of Marsico Capital, NationsBank or BankAmerica
Corporation or any other party that is an interested person of Marsico Capital,
will take any action, either before or for a period of three years after the
Transaction, that would have the effect of imposing an "unfair burden" on the
Trust as a result of the Transaction. Marsico Capital has undertaken to pay all
costs and expenses of the Meeting.
Other Matters and Shareholder Proposals
The Board of Trustees intends to bring before the Meeting the Proposal
set forth herein and in the foregoing Notice. The Trustees do not expect any
other business to be brought before the Meeting. If, however, any other matters
are properly presented to the Meetings for action, it is intended that the
persons named in the enclosed proxy will vote in accordance with their judgment.
A Contractowner executing and returning a proxy may revoke it at any time prior
to its exercise by written notice of such revocation to the Secretary of the
Trust, by execution of a subsequent proxy, or by voting in person at the
Meeting.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of the Portfolio is required to constitute a quorum at the
Meeting. Since ASLAC is the legal owner of 100% of the Portfolio's shares,
ASLAC's presence at a Meeting constitutes a quorum under the Trust's By-laws.
Shares beneficially held by Contractowners present in person or represented by
proxy at the Meeting will be counted for the purpose of calculating the votes
cast on the issues before the Meeting. Approval of the proposal requires the
vote of a "majority of the outstanding voting securities," as defined in the
Investment Company Act, of the Portfolio, which means the vote of 67% or more of
the shares of the Portfolio present at the Meeting, if the holders of more than
50% of the outstanding shares of the Portfolio are present or represented by
proxy, or the vote of more than 50% of the outstanding shares of the Portfolio,
whichever is less.
In the event that sufficient votes to approve the proposal are not
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies with respect to the
proposal. Any such adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by proxy. The persons
named as proxies will vote those proxies that they are entitled to vote FOR or
AGAINST any such adjournment proposal in their discretion.
The Trust is not required to hold and will not ordinarily hold annual
shareholders' meetings. The Board of Trustees may call special meetings of the
shareholders for action by shareholder vote as required by the Investment
Company Act or the Trust's Declaration of Trust.
Pursuant to rules adopted by the Commission, a shareholder may include
in proxy statements relating to annual and other meetings of the shareholders of
the Trust certain proposals for shareholder action which he or she intends to
introduce at such meetings; provided, among other things, that such proposal
must be received by the Trust a reasonable time before a solicitation of proxies
is made for such meeting. Timely submission of a proposal does not necessarily
mean that the proposal will be included.
By order of the Board of Trustees
/s/ Eric C. Freed
Eric C. Freed
Secretary
American Skandia Trust
<PAGE>
Exhibit A
AMERICAN SKANDIA TRUST
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Marsico Capital Management, LLC (the
"Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Trust (the "Trust") is a Massachusetts 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 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 Marsico Capital Growth
Portfolio (the "Portfolio"), one series of the Trust, under the terms of a
management agreement, dated December 22, 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 Prospectus and Statement of Additional Information of the Trust as in effect
from time to time (together, 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)
Subchapters L and M (including, respectively, Section 817(h) and Sections
851(b)(1), (2) and (3)) 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 sales of shares of 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 the Registration Statement.
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;
(g) The Trust's most recent Registration Statement;
(h) The Investment Manager's Form ADV as filed with the Securities and
Exchange Commission as of the date hereof; and
(i) 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 (h) 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 (i) 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 law.
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 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 the 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: John Birch
Senior Vice President & Chief Operating Officer
Sub-Adviser: Marsico Capital Management, LLC
1200 17th Street
Suite 1300
Denver, Colorado 80202
Attention: Barbara Japha, Esq.
Trust: American Skandia 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 February ____, 1999.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ------------------------------- --------------------------
John Birch
Senior Vice President & Chief Operating Officer
Date: ________________________ Date:______________________
Attest: _________________________ Attest_____________________
<PAGE>
American Skandia Trust
Marsico Capital Growth Portfolio
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .45% of the average daily net assets of the
Portfolio.
<PAGE>
AMERICAN SKANDIA TRUST
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS OF THE
AST MARSICO CAPITAL GROWTH PORTFOLIO
TO BE HELD ON FEBRUARY 5, 1999
The undersigned hereby appoints Maureen Gulick and Deirdre Burke and
each of them as the proxy or proxies of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all shares of beneficial
interest of the above stated Portfolio of American Skandia Trust (or "Trust")
that the undersigned is entitled to vote at a Special Meeting of the
Shareholders of the AST Marsico Capital Growth Portfolio to be held at 10:30
a.m., Eastern Time, on February 5, 1999 at the offices of the Trust at One
Corporate Drive, Shelton, Connecticut and at any adjournments thereof, upon the
matters described in the accompanying Proxy Statement and upon any other
business that may properly come before the meeting or any adjournment thereof.
Said proxies are directed to vote or to refrain from voting as checked below. If
any other matters are properly presented to the meeting for action, it is
intended that the proxies will vote in accordance with their judgment.
PLEASE SIGN BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
The undersigned acknowledges receipt with this proxy of a copy of the
Combined Notice of Special Meeting of Shareholders and the Proxy Statement of
the Trust. If a contract is jointly held, each contract owner named should sign.
If only one signs, his or her signature will be binding. If the contract owner
is a trust, custodial account or other entity, the name of the trust or the
custodial account should be entered and the trustee, custodian, etc. should sign
in his or her own name, indicating that he or she is "Trustee," "Custodian," or
other applicable designation. If the contract owner is a partnership, the
partnership should be entered and the partner should sign in his or her own
name, indicating that he or she is a "Partner."
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
CONTRACT NO:
UNITS:
CONTROL NO:
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: []
KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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AMERICAN SKANDIA TRUST - AST MARSICO CAPITAL GROWTH PORTFOLIO
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS VOTING FOR THE FOLLOWING
PROPOSALS:
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR THE PROPOSALS IF
NO CHOICE IS INDICATED.
Vote on Proposal
For Against Abstain
<S> <C> <C> <C> <C>
I. TO APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN AMERICAN SKANDIA [] [] []
INVESTMENT SERVICES, INCORPORATED AND MARSICO CAPITAL MANAGEMENT, LLC
REGARDING THE INVESTMENT ADVICE TO THE AST MARSICO CAPITAL GROWTH
PORTFOLIO.
Please be sure to sign and date this Proxy
_________________________ Date:___________ _________________________ Date: ____________
Signature [PLEASE SIGN WITHIN BOX] Signature [Co-owner]
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