AMERICAN SKANDIA TRUST
SUB-ADVISORY AGREEMENT
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THIS AGREEMENT is between American Skandia Investment Services, Incorporated and Prudential Investments LLC (the
"Investment Manager") and Pacific Investment Management Company LLC (the "Sub-Advisor"), a Limited Liability Company.
WHEREAS American Skandia Trust (the "Trust") is a Massachusetts business trust organized with one or more series of
shares, and is registered as an investment company under the Investment Company Act of 1940 (the "ICA"); and
WHEREAS the trustees of the Trust (the "Trustees") have engaged the Investment Manager to act as Investment Manager for
the AST PIMCO Limited Maturity Bond Portfolio (the "Portfolio") under the terms of a management agreement, dated May 1,
2003, with the Trust (the "Management Agreement"); and
WHEREAS the Investment Manager has engaged the Sub-Advisor and the Trustees have approved the engagement of the
Sub-Advisor to provide investment advice and other investment services set forth below;
NOW, THEREFORE the Investment Manager and the Sub-Advisor agree as follows:
1. Investment Services The Sub-Advisor will furnish the Investment Manager with investment advisory services in
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connection with a continuous investment program for the Portfolio which is to be managed in accordance with the
investment objective, investment policies and actions of the Portfolio as set forth in the Prospectus and Statement of
Additional Information of the Trust and in accordance with the Trust's Declaration of Trust and By-laws. Officers,
directors, and employees of Sub-Advisor will be available to consult with Investment Manager and the Trust, their
officers, employees and Trustees concerning the business of the Trust. Investment Manager will promptly furnish
Sub-Advisor with any amendments to such documents. Such amendments will not be effective with respect to the
Sub-Advisor until receipt thereof.
Subject to the supervision and control of the Investment Manager, which is in turn subject to the supervision and
control of the Trust's Board of Trustees, the Sub-Advisor, will in its discretion determine and select the securities to
be purchased for and sold from the Portfolio from time to time and will place orders with and give instructions to
brokers, dealers and others for all such transactions and cause such transactions to be executed. 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-Advisor authorized by the Investment Manager 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-Advisor will obtain and evaluate pertinent information about significant developments and economic,
statistical and financial data, domestic, foreign or otherwise, whether affecting the economy generally or the
Portfolio, and concerning the individual issuers whose securities are included in the Portfolio or the activities in
which they engage, or with respect to securities which the Sub-Advisor considers desirable for inclusion in the
Portfolio.
The Sub-Advisor represents that it reviewed the Registration Statement of the Trust, including any amendments or
supplement thereto, and any Proxy Statement relating to the approval of this Agreement as filed with the Securities and
Exchange Commission and represents and warrants that with respect to disclosure about the Sub-Advisor or information
relating directly or indirectly to the Sub-Advisor, such Registration Statement or Proxy Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any statement of material fact which was
required to be stated therein or necessary to make the statements contained therein not misleading. The Sub-Advisor
further represents and warrants that it is an investment advisor registered under the Investment Advisers Act of 1940,
as amended, and under the laws of all jurisdictions in which the conduct of its business hereunder requires such
registration.
Sub-Advisor shall use its best judgment, effort, and advice in rendering services under this Agreement.
In furnishing the services under this Agreement, the Sub-Advisor will comply with the requirements of the ICA and
subchapters L and M (including, respectively, Section 817(h) and Section 851(b)(1), (2), (3) and (4) of the Internal
Revenue Code, applicable to the Portfolio, and the regulations promulgated thereunder. Sub-Advisor shall comply with
(i) other applicable provisions of state or federal law; (ii) the provision of the Declaration of Trust and By-laws of
the Trust; (iii) policies and determinations of the Trust and Investment Manager, (iv) the fundamental policies and
investment restrictions of the Trust, as set out in the Trust's registration statement under the ICA, or as amended by
the Trust's shareholders; (v) the Prospectus and Statement of Additional Information of the Trust; and (vi) investment
guidelines or other instructions received in writing from Investment Manager. Sub-Advisor shall supervise and monitor
the investment program of the Portfolio.
Nothing in this Agreement shall be implied to prevent the Investment Manager from engaging other Sub-advisors to
provide investment advice and other services in relation to portfolios of the Trust for which Sub-Advisor does not
provide such or to prevent Investment Manager from providing such services itself in relation to such portfolios. The
Sub-Advisor and the Investment Manager understand and agree that if the Investment Manager manages the Portfolio in a
"manager-of-managers" style, the Investment Manager will, among other things, (i) continually evaluate the performance
of the Sub-Advisor through quantitative and qualitative analysis and consultations with the Sub-Advisor, (ii)
periodically make recommendations to the Trust's Board as to whether the contract with one or more sub-advisors should
be renewed, modified or terminated, and (iii) periodically report to the Trust's Board regarding the results of its
evaluation and monitoring functions. The Sub-Advisor recognizes that its services may be terminated or modified
pursuant to this process.
The Sub-Advisor acknowledges that the Investment Manager and the Trust intend to rely on Rules 17a-10 and 10f-3
under the ICA, to the extent applicable, and the Sub-Advisor hereby agrees that it shall not consult with any other
Sub-Advisor to the Portfolio or the Trust with respect to transactions in securities for the Portfolio's portfolio or
any other transactions of Portfolio assets. The Sub-Advisor further acknowledges that it shall not consult with any
other sub-advisor of the Portfolio that is a principal underwriter or an affiliated person of a principal underwriter
with respect to transactions in securities for the Portfolio's portfolio or any other transactions of Portfolio assets,
and that its investment advisory responsibilities as set forth in this Agreement are limited to such discrete portion
of the Portfolio's portfolio as determined by the Investment Manager.
2. Delivery of Documents to Sub-Advisor. The Investment Manager has furnished the Sub-Advisor with copies of each
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of the following documents:
(a) The Declaration of Trust of the Trust as in effect on the date hereof,
(b) The By-laws of the Trust in effect on the date hereof,
(c) The resolutions of the Trustees approving the engagement of the Sub-Advisor as Sub-Advisor to
the Investment Manager and approving the form of this agreement;
(d), The resolutions of the Trustees selecting the Investment Manager as Investment Manager to the
Trust and approving the form of the Investment Manager's Management Agreement with the Trust;
(e) The Investment Manager's Management Agreement with the Trust;
(f) The Code of Ethics of the Trust and of the Investment Manager as currently in effect; and
(g) A list of companies the securities of which are not to be bought or sold for the Portfolio
because of nonpublic information regarding such companies that is available to Investment Manager or the Trust, or
which, in the sole opinion of the Investment Manager, it believes such non-public information would be deemed to be
available to Investment Manager and/or the Trust.
The Investment Manager will furnish the Sub-Advisor 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 became
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.
3. Delivery of Documents to the Investment Manager. The Sub-Advisor has furnished the Investment Manager with
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copies of each of the following documents:
(a) The Sub-Advisor's Form ADV as filed with the Securities and Exchange Commission;
(b) The Sub-Advisor's most recent balance sheet;
(c) Separate lists of persons who the Sub-Advisor wishes to have authorized to give written and/or
oral instructions to Custodians of Trust assets for the Portfolio;
(d) The Code of Ethics of the Sub-Advisor as currently in effect.
The Sub-Advisor 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
as to items (a) through (d) above will be provided within 30 days of the time such materials became available to the
Sub-Advisor.
4. Investment Advisory Facilities. The Sub-Advisor, at its expense, will furnish all necessary investment
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facilities, including salaries of personnel required for it to execute its duties faithfully.
5. Execution of Portfolio Transactions Sub-Advisor is responsible for decisions to buy and sell securities for the
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Portfolio, broker-dealer selection, and negotiation of its brokerage commission rates. Sub-Advisor 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, or as the Board of Trustees may determine from time to time. Generally,
Sub-Advisors primary consideration in placing Portfolio securities transactions with broker-dealers for execution is to
obtain and maintain the availability of best execution at the best net price and in the most effective manner
possible. The Sub-Advisor may consider sale of shares of the Portfolio, as well as recommendations of the Investment
Manager, subject to the requirements of best net price and most favorable execution.
Consistent with this policy, the Sub-Advisor will take the following into consideration: the best net price
available, the reliability, integrity and financial condition of the broker-dealer the size of and difficulty in
executing the order, and the value of the expected contribution of the broker-dealer to the investment performance of
the Portfolio on a continual basis. Accordingly, the cost of the brokerage commissions to the Portfolio may be greater
than that available from other brokers if the difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies and procedures as the Board of Trustees of the Trust may
determine, the Sub-Advisor shall not be deemed to have acted unlawfully or to have breached any duty solely by reason
of its having caused the Portfolio to pay a broker dealer that provides such services to the Sub-Advisor for the
Portfolio's use 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 on, if the Sub-Advisor determines in good faith
that such amount of commission was reasonable in relation to the value of the research services provided by such
broker, viewed in terms of either that particular transaction or the Sub-Advisors ongoing responsibilities with respect
to the Portfolio. The Sub-Advisor is further authorized to allocate the orders placed by it on behalf of the Portfolio
to such broker-dealers who also provide research or statistical material, or other services to the Portfolio or the
Sub-Advisor. Such allocation shall be in such amounts and proposals as the Sub-Advisor shall determine and the
Sub-Advisor will report on said allocations to the Investment Manager as requested by the Investment Manager and, in
any event, at least once each calendar year if no specific request is made, indicating the brokers to whom such
allocations have been made and the basis therefor.
6. Reports by Sub-Advisor. The Sub-Advisor shall furnish the Investment Manager monthly, quarterly and annual
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reports concerning transactions and performance of the Portfolio, including information required in the Trust's
Registration, in such form as may be mutually agreed, to review the Portfolio and discuss the management of it. The
Sub-Advisor shall permit the financial statements, books and with respect to the Portfolio to be inspected and audited
by the Trust, the Investment Manager or their agents at all reasonable times during normal business hours. The
Sub-Advisor shall immediately notify and forward to both Investment Manager and legal counsel for the Trust any legal
process served upon it on behalf of the Investment Manager or the Trust The Sub-Advisor shall promptly notify the
Investment Manager of any changes in any information required to be disclosed in the Trust's Registration Statement
7. Compensation of Sub-Advisor. The amount of the compensation to the Sub-Advisor is computed at an annual rate.
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The fee is payable monthly in arrears, based on the average daily net assets of the Portfolio for each month, at the
annual rates shown below.
For all services rendered, the Investment Manager will calculate and pay the Sub-Advisor at the annual rate of:
.30 of 1% of' the portion of the net assets of the Portfolio not in excess of $150 million; and .25 of 1% of the
portion over $150 million.
In computing the fee to be paid to the Sub-Advisor, the net asset value of the Portfolio shall be valued as set
forth in the then current registration statement of the Trust. If this agreement is terminated, the payment shall be
prorated to the date of termination.
Investment Manager and Sub-Advisor shall not be considered as partners or participants in a joint venture.
Sub-Advisor will pay its own owners for the services to be provided pursuant to this Agreement and will not be
obligated to pay any expenses of Investment Manager of the Trust. Except as otherwise provided herein, Investment
Manager and the Trust will not be obligated to pay any expenses of Sub-Advisor.
8. Confidential Treatment It is understood that any information or recommendation supplied by the Sub-Advisor in
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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.
It is also understood that any information supplied to Sub-Advisor in connection with the performance of its
obligations hereunder, particularly, but not limited to, any list of securities which, on a temporary basis, may not be
bought or sold for the Portfolio, is to be regarded as confidential and for use only by the Sub-Advisor in connection
with its obligation to provide investment advice and other services to the Portfolio.
9. Representations of the Parties. Each party to this Agreement hereby acknowledges that it is registered as an
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investment advisor under the Investment Advisers Act of 1940, it will use its reasonable best efforts to maintain such
registration, and 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.
10. Liability, The Sub-Advisor shall use its best efforts and good faith in the performance of its services
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hereunder. However, so long as the Sub-Advisor has acted in good faith and has used its best efforts, then in the
absence of willful misfeasance, bad faith, gross negligence or reckless disregard for its obligations hereunder, it
shall not be liable to the Trust or its shareholders or to the Investment Manager for any act or omission resulting in
any loss suffered in any portfolio of the Trust 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 of limitation of any rights which the Trust or Investment Manager may have under
applicable law.
The Investment Manager agrees that the Sub-Advisor shall not be liable for any failure to recommend the
purchase or sale of any security on behalf of the Portfolio on the basis of any information which might, in
Sub-Advisor's opinion, constitute a violation of any federal or state laws, rules or regulations.
11. Other Activities of Sub-Advisor. Investment Manager agrees that the Sub-Advisor and any of its partners or
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employees, and persons affiliated with it or with any such partner or employee may render investment management or
advisory services to other investors and institutions, and such investors and institutions may own, purchase or sell,
securities or other interests in property the same as or similar to those which are selected for purchase, holding or
sale for the Portfolio, and the Sub-Advisor shall be in all free to take action with respect to investments in
securities or other interests in property the same as or similar to those selected for purchase, holding or sale for
the Portfolio. Purchases and sales of individual securities on behalf of the Portfolio and other portfolios of the
Trust or accounts for other investors or institutions, will be made on a basis that is equitable to all portfolios of
the Trust and other accounts. Nothing in this agreement shall impose upon the Sub-Advisor any obligation to purchase
or sell or recommend for purchase or sale, for the Portfolio any security which it, its partners, affiliates or
employees may purchase or sell for the Sub-Advisor or such partner's, affiliate's or employee's own accounts or for the
account of any other client, advisory or otherwise.
12. Continuance and Termination. This Agreement shall remain in full force and effect for one year from the date
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hereof, and is renewable annually thereafter by specific approval of the Board of Trustees of the Trust 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 Sub-Advisor upon 60 days written notice, and will automatically terminate in the event of its assignment by
either party to this Agreement as defined in the ICA, or (provided Sub-Advisor has received prior written notice
thereof) upon termination Of the Investment Manager's Management Agreement with the Trust.
13. Notification. Sub-Advisor will notify the Investment Manager within a reasonable time of any change in the
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personnel of the Sub-Advisor with responsibility for making investment decisions in relation to the Portfolio or who
have been audited to give instructions to a Custodian of the Trust.
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 address for such party.
Investment Manager: American Skandia Investment Services, Incorporated
Gateway Center Three
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Executive Vice President
Sub-Advisor: Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Trust: American Skandia Trust
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Law Department
14. Indemnification. The Sub-Advisor agrees to indemnify and hold harmless Investment Manager, any affiliated person
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within the meaning of Section 2(a)(3) of the 1940 Act ("Affiliated Person") of Investment Manager and each person, if
any who, within the meaning of Section 15 of the Securities Act of 1933 (the "1933 Act"), controls ("controlling
person") Investment Manager, against any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses), to which Investment Manager or such affiliated person or controlling person may
become subject under the 1933 Act, the 1940 Act, the Investment Advisers Act of 1940 ("Advisers Act"), under any other
statute, at common law or otherwise arising out of Sub-Advisor's responsibilities as portfolio manager of the Portfolio
(1) to the extent of and as a result of the willful misconduct, bad faith, or gross negligence by Sub-Advisor, any of
Sub-Advisor's employees or representatives or any affiliate of or any person acting on behalf of Sub-Advisor, or (2) as
a result of any untrue statement or alleged untrue statement of a material fact contained in a prospectus or statement
of additional information covering the Portfolio or the Trust or 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 written information
furnished to Investment Manager, the Trust or any affiliated person of the Investment Manager or the Trust or upon
verbal information confirmed by the Sub-Advisor in writing or (3) to the extent of, and as a result of, the failure of
the Sub-Advisor to execute, or cause to be executed, Portfolio transactions according to the standards and requirements
of the 1940 Act; provided, however, that in no case is Sub-Advisor's indemnity in favor of Investment Manager or any
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affiliated person or controlling person of 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 Sub-Advisor, any affiliated person within the
meaning of Section 2(a)(3) of the 1940 Act ("Affiliated Person") of Sub-Advisor and each person, if any who, within the
meaning of Section 15 of the Securities Act of 1933 (the "1933 Act"), controls ("controlling person") Sub-Advisor,
against any and all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses),
to which Sub-Advisor or such Affiliated Person or controlling person may become subject under the 1933 Act, the 1940
Act the Investment Adviser's Act of 1940 ('Advisees Act"), under any other statute, at common law or otherwise, arising
out of Investment Managers 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 Investment Manager, any of Investment Manager's employees
or representatives or any of or any person acting on behalf of Investment Manager, or (2) as a result of any untrue
statement or alleged untrue statement of a material fact contained in a prospectus or statement of additional
information covering the Portfolio or the Trust or 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 by the Trust other than in reliance upon written
information furnished by Sub-Advisor, or any Affiliated Person of the Sub-Advisor or other than upon verbal information
confirmed by the Sub-Advisor in writing, provided, however, that in no case is Investment Manager's indemnity in favor
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of Sub-Advisor or any affiliated person or controlling person of Sub-Advisor 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.
15. Warranty. The Investment Manager represents and warrants that (i) the appointment of the Sub-Advisor by the
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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 Investment
Company Act of 1940, the Trusts governing documents and other applicable laws.
The Sub-Advisor represents and warrants that it is authorized to perform the services contemplated to be
performed hereunder.
16. Governing Law. This agreement is made under, and shall be governed by and construed in accordance with, the laws
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of the State of Connecticut.
The effective date of this agreement is May 1, 2003.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
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Xxxxxx X. Xxxxx
Executive Vice President
Date: ____________________________ Date: ____________________________
Attest: ____________________________ Attest: ____________________________
