AMERICAN SKANDIA TRUST
AST State Street Research Small Cap Growth Portfolio
SUBADVISORY AGREEMENT
Agreement made as of this 30th day of April, 2004 between Prudential Investments LLC (PI), a New York limited liability
company and American Skandia Investment Services, Inc. (ASISI), a Maryland corporation (collectively, the Co-Managers),
and State Street Management and Research Company (State Street or the Subadviser),
WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with
American Skandia Trust, a Massachusetts trust (the Trust) 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
Co-Managers of the Trust and
WHEREAS, the Co-Managers desire to retain the Subadviser to provide investment advisory services to the Trustand one or
more of its series as specified in Schedule A hereto (individually and collectively, with the Trust, referred to herein
as the Trust) and to manage such portion of the Trust as the Co-Managers 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 Co-Managers and the Board of Trustees of the Trust, the Subadviser shall manage
such portion of the Trust's portfolio, including the purchase, retention and disposition thereof, in accordance with the
Trust'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 Trust's investments as the Co-Managers shall direct,
and shall determine from time to time what investments and securities will be purchased, retained, sold or loaned by the
Trust, 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 Agreement and Declaration of Trust, By-Laws and Prospectus of the Trust provided to it by the
Co-Managers (the Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of
Trustees of the Trust, co-operate with the Co-Managers' (or their designees') personnel responsible for monitoring the
Trust'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 Co-Managers shall provide Subadviser timely with copies of any
updated Trust documents.
(iii) The Subadviser shall determine the securities and futures contracts to be purchased or sold by such portion of the
Trust'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 Trust's Prospectus or as the
Board of Trustees may direct from time to time. In providing the Trust 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 Co-Managers (or Subadviser)
to the Trust each shall have discretion to effect investment transactions for the Trust 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 Trust 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 Co-Managers (or the Subadviser) with respect to the Trust 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 Trust 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 Trust and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect to the Trust'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 Trust's Board of Trustees such periodic and special reports as the Trustees may reasonably
request. The Subadviser shall make reasonably available its employees and officers for consultation with any of the
Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without
limitation, the valuation of the Trust's securities.
(v) The Subadviser or an affiliate shall provide the Trust's Custodian on each business day with information relating to
all transactions concerning the portion of the Trust's assets it manages, and shall provide the Co-Managers with such
information upon request of the Co-Managers.
(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 Co-Managers understand and
agree that if the Co-Managers manage the Trust in a "manager-of-managers" style, the Co-Managers 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 Trust's Board as to whether the
contract with one or more subadvisers 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 Subadviser recognizes that its
services may be terminated or modified pursuant to this process.
(vii) The Subadviser acknowledges that the Co-Managers and the Trust 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 Trust with respect to transactions in securities for the Trust's portfolio or any other transactions of
Trust assets.
(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees
or officers of the Trust 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 Trust's books and records required to be maintained by the Subadviser pursuant to
paragraph 1(a) hereof and shall timely furnish to the Co-Managers all information relating to the Subadviser's services
hereunder needed by the Co-Managers to keep the other books and records of the Trust required by Rule 31a-1 under the
1940 Act or any successor regulation. The Subadviser agrees that all records which it maintains for the Trust are the
property of the Trust, and the Subadviser will surrender promptly to the Trust any of such records upon the Trust'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 Co-Managers 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 Trust's portfolio, subject to such reporting and other requirements as shall be established by the
Co-Managers.
(g) Upon reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation
committee of the Trust or the Co-Managers in valuing securities of the Trust 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 Co-Managers shall continue to have responsibility for all services to be provided to the Trust 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 Co-Managers shall provide (or cause the Trust'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 Trust, 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 Trustees of the Trust that affect the duties of the Subadviser).
3. For the services provided and the expenses assumed pursuant to this Agreement, the Co-Managers shall pay the
Subadviser as full compensation therefor, a fee equal to the percentage of the Trust's average daily net assets of the
portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability for payment of
compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers' receipt of
payment from the Trust for management services described under the Management Agreement between the Trust and the
Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the
Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.
4. The Subadviser shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers
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 Co-Managers or the Trust may have against the Subadviser under federal or state securities laws. The
Co-Managers 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 Co-Managers' 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
Co-Managers, their affiliated persons, their 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 Trust at any time, without the payment of any penalty, by the Board
of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Fund, or by the Co-Managers 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 Trust and the Co-Managers 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 Trust at Gateway Center Three, 4th Floor, 000 Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; or (3) to the Subadviser at Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000.
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 Trust 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 Co-Managers agree 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 Trust 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 Trust 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/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Executive Vice President
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AMERICAN SKANDIA INVESTMENT SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Executive Vice President
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STATE STREET MANAGEMENT AND RESEARCH COMPANY
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Managing Director
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SCHEDULE A
AMERICAN SKANDIA TRUST
AST State Street Research Small Cap Growth Portfolio
As compensation for services provided by State Street, Prudential Investments LLC and American Skandia Investment
Services, Inc. will pay State Street a fee equal, on an annualized basis, to the following:
Portfolio Name Advisory Fee
AST State Street Research Small Cap Growth Portfolio 0.50% for first $350 million of assets;
0.45% over $350 million of assets1
Dated as of April 30, 2004.
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1 The assets of the AST State Street Research Small Cap Growth Portfolio will be aggregated with the assets of all other
portfolios managed or co-managed by PI for which State Street serves as subadviser, for purposes of the fee calculation.
