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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 Xxxxxxxxx Xxxxxx Management, Inc. (the "Sub-Advisor").
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 Xxxxxxxxx Xxxxxx Mid-Cap Value 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
connection with a continuous investment program for the Portfolio which is to be managed in accordance with the
investment objective, investment policies and restrictions 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, to the extent necessary in its sole judgment, 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
supplements 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 to the Sub-Advisor or the investment program conducted by the Sub-Advisor for the Portfolio or which otherwise
relates directly or indirectly to the Sub-Advisor's activities in connection with the Portfolio (such disclosure and
information being hereinafter collectively referred to as "Sub-Advisor Information"), such Registration Statement or
Proxy Statement contains, as of their respective dates and, if later, the effective date of this Agreement, 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; it being understood that the Sub-Advisor shall have
no responsibility for any other portion of the Registration Statement or Proxy Statement. 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.
In furnishing the services under this Agreement, the Sub-Advisor will use its best efforts to comply with the
requirements of the ICA and Sections 817(h) and Section 851(b)(2) and (3)) 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. The Investment Manager acknowledges to the Sub-Advisor that the Investment Manager also is responsible to the
Trust for monitoring compliance with the foregoing requirements; it being understood that such acknowledgement shall in
no way diminish the Sub-Advisor's responsibilities under this provision.
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 services, 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
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;
(h) the Registration Statement of the Trust;
(i) the Proxy Statement relating to this Agreement; and
(j) the Investment Manager's most recent balance sheet.
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. The Investment Manager
will advise the Sub-Advisor 30 days prior to the effective date of any changes in the investment objective, investment
policies, or investment restrictions applicable to the Portfolio.
3. Delivery of Documents to the Investment Manager. The Sub-Advisor has furnished the Investment Manager with
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 material 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
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
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. The Sub-Advisor may consider sale
of the shares of the Portfolio, as well as recommendations of the Investment Manager, subject to the requirements of best
net price and most favorable execution.
With respect to brokerage, 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 continuing 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 research 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 transaction, 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-Advisor's 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 proportions as the Sub-Advisor shall determine and the Sub-Advisor will
report on said allocations to the Investment Manager regularly 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
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 books and records maintained by it 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 Sub-Advisor Information included 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.
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:
..50% of the portion of the net assets of the Portfolio not in excess of $750 million; .45% of the portion over $750
million but not in excess of $1 billion; and .40% of the portion in excess of $1 billion.
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 expenses for the services to be provided pursuant to this Agreement and will not be
obligated to pay any expenses of Investment Manager or 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
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
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 give the Portfolio the benefit of the Sub-Advisor's best judgment and efforts
in rendering its services hereunder. As an inducement to the Sub-Advisor's undertaking to render these services, the
parties agree that, except as provided in Section 14 hereunder, the Sub-Advisor shall not be liable to the Trust or its
shareholders or to the Investment Manager for any mistake in judgment or for any act or omission resulting in any loss in
connection with any service provided herein in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard for its obligations hereunder. The Sub-Advisor and the Investment Manager further agree that the
Sub-Advisor shall bear no responsibilities or obligations for any portfolios of the Trust other than the Portfolio and
any other portfolio with respect to which it serves as sub-advisor.
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 officers or
employees, and persons affiliated with it or with any such officer 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 respects 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 or accounts for other investors or
institutions will be made on a basis that is equitable to the Portfolio 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 officers, affiliates or employees may purchase or sell for the Sub-Advisor or such officer'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
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
personnel of the Sub-Advisor with responsibility for making investment decisions in relation to the Portfolio or who have
been authorized 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
Prudential Investments LLC
Gateway Center Three
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Executive Vice President
Sub-Advisor: Xxxxxxxxx Xxxxxx Management, Inc.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000-0000
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
within the meaning of Section 2(a)(3) of the 1940 Act ("affiliated person") of Investment Manager (which shall not be
deemed to include the Trust or the Portfolio) 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
Adviser's Act of 1940 ("Adviser's 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 Sub-Advisor Information set forth 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 for the purpose of inclusion in such prospectus or statement of additional
information, 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 requirements set forth in the 1940 Act; provided, however, that in no
case is Sub-Advisor's indemnity in favor of Investment Manager or any 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 ("Adviser's Act"), under any other statute, at common law or otherwise, arising out
of 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 Investment Manager, any of Investment Manager's employees or
representatives or any affiliate 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 Sub-Advisor Information set forth 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 for the purpose of inclusion in such prospectus or
statement of additional information; provided, however, that in no case is Investment Manager's indemnity in favor 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
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 Trust's 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
of the State of Connecticut.
The effective date of this agreement is October 31, 2003.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISOR:
_____________________________________ _________________________________
Xxxxxx X. Xxxxx
Executive Vice President
Date: Date:
Attest: Attest:
