AMERICAN SKANDIA ADVISOR FUNDS, INC.
ASAF International Equity Fund
SUBADVISORY AGREEMENT
Agreement made as of this _______ day of ___________, 2003 between Prudential Investments LLC, a New York limited liability company
(PI), American Skandia Investment Services, Inc. (ASISI), a Delaware corporation (PI and ASISI together, the Manager), and Xxxxxxx
Xxxxx & Company, LLC (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with American Skandia
Advisor Funds, Inc. (ASAF), a Maryland corporation, with respect to the ASAF International Equity Fund (the Fund), a series of ASAF
and a diversified, open-end management investment company registered under the Investment Company Act of 1940 as amended (the 1940
Act), pursuant to which PI and ASISI act as Manager of the Fund; and
WHEREAS, the Manager desires to retain the Subadviser to provide investment advisory services to the Fund and to manage such portion
of the Fund as the Manager shall from time to time direct, and the Subadviser is willing to render such investment advisory services;
and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of Directors of the Fund, the Subadviser shall manage such portion of
the Fund's portfolio, including the purchase, retention and disposition thereof, in accordance with the Fund's investment objectives,
policies and restrictions as stated in its then current prospectus and statement of additional information (such Prospectus and
Statement of Additional Information as currently in effect and as amended or supplemented from time to time, being herein called the
"Prospectus"), and subject to the following understandings:
(i) The Subadviser shall provide supervision of such portion of the Fund's investments as the Manager shall direct, and shall
determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Fund, and what portion
of the assets will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the copies of
the Articles of Incorporation, By-Laws and Prospectus of the Fund provided to it by the Manager (the Fund Documents) and with the
instructions and directions of the Manager and of the Board of Directors of the Fund, co-operate with the Manager's (or its
designee's) personnel responsible for monitoring the Fund's compliance and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986, as amended, and all other applicable federal and state laws and regulations. In
connection therewith, the Subadviser shall, among other things, prepare and file such reports as are, or may in the future be,
required by the Securities and Exchange Commission (the Commission). The Manager shall provide Subadviser timely with copies of any
updated Fund documents.
(iii) The Subadviser shall determine the securities and futures contracts to be purchased or sold by such portion of the Fund's
portfolio, as applicable, and will place orders with or through such persons, brokers, dealers or futures commission merchants
(including but not limited to Prudential Securities Incorporated (or any broker or dealer affiliated with the Subadviser) to carry
out the policy with respect to brokerage as set forth in the Fund's Prospectus or as the Board of Directors may direct from time to
time. In providing the Fund with investment supervision, it is recognized that the Subadviser will give primary consideration to
securing the most favorable price and efficient execution. Within the framework of this policy, the Subadviser may consider the
financial responsibility, research and investment information and other services provided by brokers, dealers or futures commission
merchants who may effect or be a party to any such transaction or other transactions to which the Subadviser's other clients may be a
party. The Manager (or Subadviser) to the Fund each shall have discretion to effect investment transactions for the Fund through
broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) 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 Fund to pay any such broker-dealers an amount of
commission for effecting a portfolio transaction in excess of the amount of commission another broker-dealer would have charged for
effecting that transaction, if the brokerage or research services provided by such broker-dealer, viewed in light of either that
particular investment transaction or the overall responsibilities of the Manager (or the Subadviser) with respect to the Fund and
other accounts as to which they or it may exercise investment discretion (as such term is defined in Section 3(a)(35) of the 1934
Act), are reasonable in relation to the amount of commission.
On occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Fund
as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but
shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased in order to obtain the most
favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the securities or futures
contracts so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Subadviser in the manner the
Subadviser considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect to the Fund's portfolio transactions effected by it as required
by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act, and shall render to the
Fund's Board of Directors such periodic and special reports as the Directors may reasonably request. The Subadviser shall make
reasonably available its employees and officers for consultation with any of the Directors or officers or employees of the Fund with
respect to any matter discussed herein, including, without limitation, the valuation of the Fund's securities.
(v) The Subadviser or an affiliate shall provide the Fund's Custodian on each business day with information relating to all
transactions concerning the portion of the Fund's assets it manages, and shall provide the Manager with such information upon request
of the Manager.
(vi) The investment management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall
be free to render similar services to others. Conversely, the Subadviser and Manager understand and agree that if the Manager manages
the Fund in a "manager-of-managers" style, the Manager will, among other things, (i) continually evaluate the performance of the
Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii) periodically make
recommendations to the Fund's Board as to whether the contract with one or more subadvisers should be renewed, modified, or
terminated, and (iii) periodically report to the Fund's Board regarding the results of its evaluation and monitoring functions. The
Subadviser recognizes that its services may be terminated or modified pursuant to this process.
(vii) The Subadviser acknowledges that the Manager and the Fund intend to rely on Rule 17a-10, Rule 10f-3, Rule 12d3-1 and Rule 17e-1
under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to the Fund with respect to
transactions in securities for the Fund's portfolio or any other transactions of Fund assets.
(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Directors or
officers of the Fund to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any of such directors, officers or employees.
(c) The Subadviser shall keep the Fund's books and records required to be maintained by the Subadviser pursuant to paragraph 1(a)
hereof and shall timely furnish to the Manager all information relating to the Subadviser's services hereunder needed by the Manager
to keep the other books and records of the Fund required by Rule 31a-1 under the 1940 Act or any successor regulation. The Subadviser
agrees that all records which it maintains for the Fund are the property of the Fund, and the Subadviser will surrender promptly to
the Fund any of such records upon the Fund's request, provided, however, that the Subadviser may retain a copy of such records. The
Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act or any successor
regulation any such records as are required to be maintained by it pursuant to paragraph 1(a) hereof.
(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain adequate compliance procedures to ensure
its compliance with the 1940 Act, the Investment Advisers Act of 1940, as amended, and other applicable state and federal
regulations.
(e) The Subadviser shall furnish to the Manager copies of all records prepared in connection with (i) the performance of this
Agreement and (ii) the maintenance of compliance procedures pursuant to paragraph 1(d) hereof as the Manager may reasonably request.
(f) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held
in the Fund's portfolio, subject to such reporting and other requirements as shall be established by the Manager.
(g) Upon reasonable request from the Manager, the Subadviser (through a qualified person) will assist the valuation committee of the
Fund or the Manager in valuing securities of the Fund as may be required from time to time, including making available information of
which the Subadviser has knowledge related to the securities being valued.
2. The Manager shall continue to have responsibility for all services to be provided to the Fund pursuant to the Management Agreement
and, as more particularly discussed above, shall oversee and review the Subadviser's performance of its duties under this Agreement.
The Manager shall provide (or cause the Fund's custodian to provide) timely information to the Subadviser regarding such matters as
the composition of assets in the portion of the Fund managed by the Subadviser, cash requirements and cash available for investment
in such portion of the Fund, and all other information as may be reasonably necessary for the Subadviser to perform its duties
hereunder (including any excerpts of minutes of meetings of the Board of Directors of the Fund that affect the duties of the
Subadviser).
3. For the services provided and the expenses assumed pursuant to this Agreement, the Manager shall pay the Subadviser as full
compensation therefor, a fee equal to the percentage of the Fund's average daily net assets of the portion of the Fund managed by the
Subadviser as described in the attached Schedule A. Liability for payment of compensation by the Manager to the Subadviser under this
Agreement is contingent upon the Manager's receipt of payment from the Fund for management services described under the Management
Agreement between the Fund and the Manager. Expense caps or fee waivers for the Fund that may be agreed to by the Manager, but not
agreed to by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Manager.
4. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Fund or the Manager in connection
with the matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on
the Subadviser's part in the performance of its duties or from its reckless disregard of its obligations and duties under this
Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Manager or the Fund may have
against the Subadviser under federal or state securities laws. The Manager shall indemnify the Subadviser, its affiliated persons,
its officers, directors and employees, for any liability and expenses, including attorneys' fees, which may be sustained as a result
of the Manager's willful misfeasance, bad faith, gross negligence, reckless disregard of its duties hereunder or violation of
applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The Subadviser shall indemnify the
Manager, its affiliated persons, its officers, directors and employees, for any liability and expenses, including attorneys' fees,
which may be sustained as a result of the Subadviser's willful misfeasance, bad faith, gross negligence, or reckless disregard of its
duties hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws.
5. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the requirements of the 1940 Act; provided, however, that this
Agreement may be terminated by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by
vote of a majority of the outstanding voting securities (as defined in the 0000 Xxx) of the Fund, or by the Manager or the Subadviser
at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment (as defined in the 0000 Xxx) or upon the termination of
the Management Agreement. The Subadviser agrees that it will promptly notify the Fund and the Manager of the occurrence or
anticipated occurrence of any event that would result in the assignment (as defined in the 0000 Xxx) of this Agreement, including,
but not limited to, a change or anticipated change in control (as defined in the 0000 Xxx) of the Subadviser; provided that the
Subadviser need not provide notice of such an anticipated event before the anticipated event is a matter of public record.
Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed
by registered mail, postage prepaid, (1) to the Manager at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX
00000-0000, Attention: Secretary; (2) to the Fund at Gateway Center Three, 4th Floor, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary; or (3) to the Subadviser at ______________________.
6. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser's directors, officers or employees who may
also be a Trustee, officer or employee of the Fund to engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any business, whether of a similar or a dissimilar nature, nor limit or restrict the
Subadviser's right to engage in any other business or to render services of any kind to any other corporation, firm, individual or
association.
7. During the term of this Agreement, the Manager agrees to furnish the Subadviser at its principal office all prospectuses, proxy
statements, reports to shareholders, sales literature or other material prepared for distribution to shareholders of the Fund or the
public, which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects
in writing five business days (or such other time as may be mutually agreed) after receipt thereof. Sales literature may be furnished
to the Subadviser hereunder by first-class or overnight mail, facsimile transmission equipment or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of the Fund must be obtained in conformity with the requirements
of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
10. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act and to interpretations
thereof, if any, by the United States courts or, in the absence of any controlling decision of any such court, by rules, regulations
or orders of the Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act,
reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day
and year first above written.
PRUDENTIAL INVESTMENTS LLC
By: /s/
Name:
Title:
AMERICAN SKANDIA INVESTMENT SERVICES, INC.
By: /s/
Name:
Title:
XXXXXXX XXXXX & COMPANY, LLC
By: /s/
Name:
Title:
SCHEDULE A
AMERICAN SKANDIA ADVISOR FUNDS, INC.
ASAF International Equity Fund
As compensation for services provided by Xxxxxxx Xxxxx & Company, LLC, the Manager will pay Xxxxxxx Xxxxx & Company, LLC a fee equal,
on an annualized basis, to the following:
Portfolio Name Advisory Fee
Dated as of , 2003.
