AMERICAN SKANDIA ADVISOR FUNDS, INC.
SUB-ADVISORY AGREEMENT
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THIS AGREEMENT is between American Skandia Investment Services, Incorporated (the "Investment Manager") and Xxxxxxx X. Xxxxxxxxx &
Co., LLC (the "Value Sub-Adviser") and Alliance Capital Management L.P. (the "Growth Sub-Adviser") (each a "Sub-Adviser" and
collectively, the "Sub-Advisers") .
W I T N E S S E T H
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WHEREAS, American Skandia Advisor Funds, Inc. (the "Company") is a Maryland corporation organized with one or more series of shares
and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "ICA"); and
WHEREAS, the Investment Manager is an investment adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Directors of the Company (the "Directors") have engaged the Investment Manager to act as investment manager for
the ASAF Alliance/ Xxxxxxxxx Growth + Value Fund (the "Fund"), one series of the Company, under the terms of a management agreement,
dated March 1, 2001, with the Company (the "Management Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement, wishes to engage the Value Sub-Adviser to provide
investment advice and other investment services set forth below for the value portion of the Fund (the "Value Portfolio") which will
consist of approximately 50 per cent of the investable assets of the Fund and to engage the Growth Sub-Adviser to provide investment
advice and other investment services for the remainder of the investable assets of the Fund (the "Growth Portfolio") (together, the
"Portfolios"), and the Directors have approved the engagement of the Sub-Advisers, to provide such investment advice and other
investment services.
NOW, THEREFORE, the Investment Manager and the Sub-Advisers agree as follows:
1. Investment Services. The Sub-Advisers together will formulate and implement a continuous investment program for the Fund
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conforming to the investment objective, investment policies and restrictions as set forth in the Prospectus and Statement of
Additional Information of the Company as in effect from time to time (together, the "Registration Statement"), the Articles of
Incorporation and By-laws of the Company, and any investment guidelines or other instructions received by the Sub-Advisers in writing
from the Investment Manager from time to time. Any amendments to the foregoing documents will not be deemed effective with respect
to either of the Sub-Advisers until such Sub-Adviser's receipt thereof. The appropriate officers and employees of the Sub-Advisers
will be available to consult with the Investment Manager, the Company and the Directors at reasonable times and upon reasonable
notice concerning the business of the Company, including valuations of securities which are not registered for public sale, not
traded on any securities market or otherwise may be deemed illiquid for purposes of the ICA; provided it is understood that the
Sub-Advisers are not responsible for daily pricing of the Fund's assets.
Subject to the supervision and control of the Investment Manager, which in turn is subject to the supervision and control of
the Directors, the Sub-Advisers in their discretion will determine which issuers and securities will be purchased, held, sold or
exchanged by the portions of the Fund under their management or otherwise represented in the Fund's investment portfolios from time
to time and, subject to the provisions of paragraphs 3 and 4 of this Agreement, will place orders with and give instructions to
brokers, dealers and others for all such transactions and cause such transactions to be executed. Either of the Sub-Advisers may
delegate its investment advisory and other responsibilities and duties hereunder to an affiliated person of such Sub-Adviser, subject
to such Sub-Adviser retaining overall responsibility for such powers and functions and any and all obligations and liabilities in
connection therewith. The Value Sub-Adviser shall be responsible for and supervise the activities of the Sub-Advisers, including the
Sub-Advisers' compliance responsibilities hereunder and allocation of Fund assets between the Growth and Value Portfolios as
described in the Registration Statement. The Sub-Advisers shall be jointly responsible for the provision of the investment advisory
and other services contemplated by this Agreement. Custody of the Fund 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-Advisers designated by
the Sub-Advisers to settle transactions in respect of the Portfolios under their respective management, and to honor orders and
instructions by employees of the Value Sub-Adviser regarding allocation of daily net Fund purchase proceeds between the Growth and
Value Portfolios. No assets may be withdrawn from the Fund other than for settlement of transactions on behalf of the Fund except
upon the written authorization of appropriate officers of the Company who shall have been certified as such by proper authorities of
the Company prior to the withdrawal.
The Sub-Advisers will not be responsible for the provision of administrative, bookkeeping or accounting services to the Fund
except as specifically provided herein, as required by the ICA or the Advisers Act or as may be necessary for the Sub-Advisers to
supply to the Investment Manager, the Fund or the Fund's shareholders the information required to be provided by the Sub-Advisers
hereunder. Any records maintained hereunder shall be the property of the Fund and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Advisers will comply with and use its best efforts to enable the
Fund to conform to the requirements of: (i) the ICA and the regulations promulgated thereunder; (ii) Subchapter M of the Internal
Revenue Code and the regulations promulgated thereunder; (iii) other applicable provisions of state or federal law; (iv) the Articles
of Incorporation and By-laws of the Company; (v) policies and determinations of the Company and the Investment Manager provided to
the Sub-Advisers in writing; (vi) the fundamental and non-fundamental investment policies and restrictions applicable to the Fund, as
set out in the Registration Statement of the Company in effect, or as such investment policies and restrictions from time to time may
be amended by the Fund's shareholders or the Directors and communicated to the Sub-Advisers in writing; (vii) the Registration
Statement; and (viii) investment guidelines or other instructions received in writing from the Investment Manager. Notwithstanding
the foregoing, the Sub-Advisers shall have no responsibility to monitor compliance with limitations or restrictions for which
information from the Investment Manager or its authorized agents is required to enable the Sub-Advisers to monitor compliance with
such limitations or restrictions unless such information is provided to the Sub-advisers in writing. The Sub-Advisers shall
supervise and monitor the activities of their respective representatives, personnel and agents in connection with the investment
program of the Fund.
Nothing in this Agreement shall be implied to prevent the Investment Manager from engaging other sub-advisers to provide
investment advice and other services to the Fund or to series or portfolios of the Company for which the Sub-Advisers do not provide
such services, or to prevent the Investment Manager from providing such services itself in relation to the Fund or such other series
or portfolios. In the event that the Investment Manager engages another sub-adviser to provide investment advice and/or services to
the Fund or to the Portfolios, the Investment Manager agrees to provide the Sub-Advisers with written notice of such engagement.
The Sub-Advisers shall be responsible for exercising any voting rights on any securities held by their respective Portfolios
of the Fund. The Sub-Advisers shall be responsible for the preparation and filing of Schedule 13G and Form 13-F reflecting the
Fund's securities holdings as part of the Sub-Advisers' overall holdings. The Sub-Advisers shall not be responsible for the
preparation or filing of any other reports required of the Fund by any governmental or regulatory agency, except as expressly agreed
in writing.
2. Investment Advisory Facilities. The Sub-Advisers, at their expense, will furnish all necessary investment facilities,
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including salaries of personnel, required for them to execute their respective duties hereunder.
3. Execution of Fund Transactions. In connection with the investment and reinvestment of the assets of the Fund, the
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Sub-Advisers are responsible for the selection of broker-dealers to execute purchase and sale transactions for their respective
Portfolios of the Fund in conformity with the policy regarding brokerage as set forth in the Registration Statement, or as the
Directors may determine from time to time, as well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Advisers' primary consideration in placing Fund investment transactions with broker-dealers for
execution will be to obtain, and maintain the availability of, best execution at the best available price. To the extent permitted
by applicable law, the Value Sub-Adviser may receive investment transactions/instructions from the Growth Sub-Adviser for execution
on behalf of the Growth Portfolio.
Consistent with this policy, the Sub-Advisers, in selecting broker-dealers and negotiating brokerage commission rates, will
take all relevant factors into consideration, including, but not limited to: the best price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in executing the order; and the value of the expected
contribution of the broker-dealer to the investment performance of the Fund on a continuing basis. Subject to such policies and
procedures as the Directors may determine, the Sub-Advisers shall have discretion to effect investment transactions for the
respective Portfolios of the Fund under their management through broker-dealers (including, to the extent permissible under
applicable law, broker-dealers affiliated with the Sub-Advisers) 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 investment
transaction in excess of the amount of commission another broker-dealer would have charged for effecting that transaction, if the
Sub-Advisers determine in good faith that such amount of commission is reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that particular investment transaction or the
Sub-Advisers' overall responsibilities with respect to the Fund and other accounts as to which the Sub-Advisers exercise investment
discretion (as such term is defined in Section 3(a)(35) of the 1934 Act). Allocation of orders placed by the Sub-Advisers on behalf
of the Fund to such broker-dealers shall be in such amounts and proportions as the Sub-Advisers shall determine in good faith in
conformity with its responsibilities under applicable laws, rules and regulations. The Sub-Advisers will submit joint or individual
reports on such allocations to the Investment Manager regularly as requested by the Investment Manager, in such form as may be
mutually agreed to by the parties hereto, indicating the broker-dealers to whom such allocations have been made and the basis
therefor.
Subject to the foregoing provisions of this paragraph 3, the Sub-Advisers may also consider sales of shares of the Fund and
of other funds of the Company managed by either Sub-Adviser or their affiliates, or may consider or follow recommendations of the
Investment Manager that such sales take into account, as factors in the selection of broker-dealers to effect the Fund's investment
transactions. Notwithstanding the above, nothing shall require the Sub-Advisers to use a broker-dealer which provides research
services or to use a particular broker-dealer which the Investment Manager has recommended.
In lieu of selecting broker-dealers to execute transactions for the Fund, the Value Sub-Adviser may execute such
transactions for the Fund provided that the Value Sub-Adviser "steps-out" such transactions to the broker-dealers selected by the
Value Sub-Adviser. A step-out is a service provided by the New York Stock Exchange and other markets which allows the Value
Sub-Adviser to provide the Fund with the benefit of the Value Sub-Adviser's execution capabilities at no additional charge and then
transfer or step-out the confirmation and settlement responsibilities of such transactions to the broker-dealer(s) selected by the
Value Sub-Adviser. In connection with a step-out, transaction charges shall be paid by the Fund to the broker-dealers selected by
the Value Sub-Adviser and not to the Value Sub-Adviser.
In addition to selecting brokers or dealers to execute transactions for the Fund, the Value Sub-Adviser may, subject to its
duty to seek best execution at the best available price, also act as a broker for the Fund from time to time at rates not exceeding
the usual and customary broker's commission. Under Federal law, the Value Sub-Adviser must obtain the Investment Manager's consent to
effect agency cross transactions for the Fund, which consent is hereby granted. The Value Sub-Adviser represents, warrants and
covenants that all agency cross transactions for the Fund will be effected by the Value Sub-Adviser strictly in accordance with Rule
206(3)-2 under the Advisers Act. An agency cross transaction is where the Value Sub-Adviser purchases or sells securities from or to
a non-managed account on behalf of a client's managed account. Pursuant to this consent, the Value Sub-Adviser will only effect an
agency cross transaction for the Fund with a non-managed account. When the Value Sub-Adviser crosses transactions in connection with
a step-out, the Value Sub-Adviser will receive a commission from the transaction only with respect to the non-managed account and
will not receive a commission from the transaction with respect to the Fund. In an agency cross transaction where the Value
Sub-Adviser acts as broker for the Fund, the Value Sub-Adviser receives commissions from both sides of the trade and there is a
potentially conflicting division of loyalties and responsibilities. However, as both sides to the trade want to execute the
transaction at the best price without moving the market price in either direction, the Value Sub-Adviser believes that an agency
cross transaction will aid both sides to the trade in obtaining the best price for the trade. THE COMPANY OR THE INVESTMENT MANAGER
MAY REVOKE THIS CONSENT BY WRITTEN NOTICE TO THE VALUE SUB-ADVISER AT ANY TIME.
4. Re-Allocation of Fund Assets. The Value Sub-Adviser shall furnish and maintain systems and procedures to monitor and
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maintain as reasonably practicable an allocation of net assets of the Fund between the Value Portfolio and the Growth Portfolio to
conform to the investment objectives and policies described in the Registration Statement, as may be necessary (the "Target
Allocation"). Purchases and sales of securities for the Fund resulting from purchases and redemptions of Fund shares shall be
coordinated and managed by the Sub-Advisers for purposes of maintaining the Target Allocation. The Sub-Advisers shall cooperate with
each other and take any and all such actions as may be necessary or appropriate for purposes of maintaining the Target Allocation.
5. Reports by the Sub-Advisers. The Sub-Advisers shall furnish the Investment Manager individual and/or joint monthly,
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quarterly and annual reports, as may reasonably be requested by the Investment Manager concerning the transactions, performance, and
compliance of the Fund so that the Investment Manager may review such matters and discuss the management of the Fund. The
Sub-Advisers shall permit the books and records maintained with respect to the Fund to be inspected and audited by the Company, the
Investment Manager or their respective agents at all reasonable times during normal business hours upon reasonable notice. Each
Sub-Adviser severally shall immediately notify both the Investment Manager and the Company of any legal process served upon it in
connection with its activities hereunder, including any legal process served upon it on behalf of the Investment Manager, the Fund,
the Value Portfolio, the Growth Portfolio or the Company. Each Sub-Adviser severally shall immediately notify the Investment Manager
of (1) any changes in any information regarding each Sub-Adviser or the investment program for the Fund required to be disclosed in
the Company's Registration Statement, or (2) any violation of any requirement, provision, policy or restriction that the Sub-Advisers
are required to comply with under Section 1 of this Agreement.
6. Compensation of the Sub-Advisers. The amount of the compensation to each Sub-Adviser is computed at an annual rate. The
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fee shall be payable monthly in arrears, based on the average daily net assets of each Portfolio for each month, at the annual rate
set forth in Exhibit A to this Agreement. For administrative convenience, the parties may agree to have the aggregate fee due to the
Sub-Advisers remitted to one Sub-Adviser.
In computing the fee to be paid to each Sub-Adviser, the net asset value of each Portfolio shall be valued as set forth in
the Registration Statement. If this Agreement is terminated, the payment of compensation described herein shall be prorated to the
date of termination.
The Investment Manager shall not be considered as a partner or participant in a joint venture with the Sub-Advisers. The
Sub-Advisers will pay their own expenses for the services to be provided pursuant to this Agreement and will not be obligated to pay
any expenses of the Investment Manager, the Fund or the Company. Except as otherwise specifically provided herein, the Investment
Manager, the Fund and the Company will not be obligated to pay any expenses of either Sub-Adviser.
7. Delivery of Documents to the Sub-Advisers. The Investment Manager has furnished the Sub-Advisers with true, correct and
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complete copies of each of the following documents:
(a) The Articles of Incorporation of the Company, as in effect on the date hereof;
(b) The By-laws of the Company, as in effect on the date hereof;
(c) The resolutions of the Directors approving the engagement of the Sub-Advisers as portfolio managers of the Fund and
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approving the form of this Agreement;
(d) The resolutions of the Directors selecting the Investment Manager as investment manager to the Fund and approving
the form of the Management Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Company and of the Investment Manager, as in effect on the date hereof;
(g) The Registration Statement; and
(h) A list of companies the securities of which are not to be bought or sold for the Fund.
The Investment Manager will furnish the Sub-Advisers 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
(g) above will be provided within 30 days of the time such materials become available to the Investment Manager. Such amendments or
supplements as to item (h) above will be provided not later than the end of the business day next following the date such amendments
or supplements become known to the Investment Manager. Any amendments or supplements to the foregoing will not be deemed effective
with respect to the Sub-Advisers until the Value Sub-Adviser's receipt thereof. The Investment Manager will provide such additional
information as the Sub-Advisers may reasonably request in connection with the performance of its duties hereunder.
8. Delivery of Documents to the Investment Manager. Each Sub-Adviser has furnished the Investment Manager with true, correct
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and complete copies of each of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who each Sub-Adviser wishes to have authorized to give written and/or oral instructions to
Custodians of Company assets for the Fund; and
(d) The Code of Ethics of each Sub-Adviser, as in effect on the date hereof.
Each Sub-Adviser will furnish the Investment Manager from time to time with copies, properly certified or otherwise
authenticated, of all amendments of or supplements to the foregoing, if any. Such amendments or supplements will be provided within
30 days of the time such materials become available to the Sub-Advisers. Any amendments or supplements to the foregoing will not be
deemed effective with respect to the Investment Manager until the Investment Manager's receipt thereof. Each Sub-Adviser severally
will provide additional information as the Investment Manager may reasonably request in connection with each Sub-Adviser's
performance of its duties under this Agreement.
9. Confidential Treatment. Except as may be required by law, the parties hereto understand that any information or
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recommendation supplied by either Sub-Adviser in connection with the performance of their obligations hereunder is to be regarded as
confidential and for use only by the Investment Manager, the Company or such persons the Investment Manager may designate in
connection with the Fund. The parties also understand that any information supplied to either Sub-Adviser in connection with the
performance of its obligations hereunder, particularly, but not limited to, any list of securities which may not be bought or sold
for the Fund, is to be regarded as confidential and for use only by the Sub-Adviser in connection with its obligation to provide
investment advice and other services to the Fund.
10. Representations of the Parties. Each party hereto hereby further represents and warrants to the other that: (i) it is
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registered as an investment adviser under the Advisers Act and is registered or licensed as an investment adviser under the laws of
all jurisdictions in which its activities require it to be so registered or licensed; and (ii) it will use its reasonable best
efforts to maintain each such registration or license in effect at all times during the term of this Agreement; and (iii) it will
promptly notify the other if it ceases to be so registered, if its registration is suspended for any reason, or if it is notified by
any regulatory organization or court of competent jurisdiction that it should show cause why its registration should not be suspended
or terminated; and (iv) it is duly authorized to enter into this Agreement and to perform its obligations hereunder.
Each Sub-Adviser further represents that it has adopted a written Code of Ethics in compliance with Rule 17j-1(b) of the
ICA. Each Sub-Adviser shall be subject to such Code of Ethics and shall not be subject to any other Code of Ethics, including the
Investment Manager's Code of Ethics, unless specifically adopted by the Sub-Adviser. The Investment Manager further represents and
warrants to each Sub-Adviser that (i) the appointment of the Sub-Adviser by the Investment Manager has been duly authorized and (ii)
it has acted and will continue to act in connection with the transactions contemplated hereby, and the transactions by the Investment
Manager or Fund contemplated hereby are, in conformity with the ICA, the Company's governing documents and other applicable law.
11. Liability. In the absence of willful misfeasance, bad faith, gross negligence or reckless disregard for their obligations
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hereunder, the Sub-Advisers shall not be liable to the Company, the Fund, the Fund's shareholders or the Investment Manager for any
act or omission resulting in any loss suffered by the Company, the Fund, the Fund's shareholders or the Investment Manager in
connection with any service to be provided herein. The Federal laws impose responsibilities under certain circumstances on persons
who act in good faith, and therefore, nothing herein shall in any way constitute a waiver or limitation of any rights which the
Company, the Fund or the Investment Manager may have under applicable law. The liability of the Sub-Advisers under this Agreement
shall be joint and several.
12. Other Activities of the Sub-Advisers. The Investment Manager agrees that the Sub-Advisers and any of their partners or
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employees, and persons affiliated with the Sub-Advisers or with any such partner or employee, may render investment management or
advisory services to other investors and institutions, and that such investors and institutions may own, purchase or sell, securities
or other interests in property that are the same as, similar to, or different from those which are selected for purchase, holding or
sale for the Fund. The Investment Manager further acknowledges that the Sub-Advisers shall be in all respects free to take action
with respect to investments in securities or other interests in property that are the same as, similar to, or different from those
selected for purchase, holding or sale for the Fund. The Investment Manager understands that the Sub-Advisers shall not favor or
disfavor any of the Sub-Advisers' clients or class of clients in the allocation of investment opportunities, so that to the extent
practical, such opportunities will be allocated among the Sub-Advisers' clients over a period of time on a fair and equitable basis.
Nothing in this Agreement shall impose upon the Sub-Advisers any obligation to (i) purchase or sell, or recommend for purchase or
sale, for the Fund any security which the Sub-Advisers, their partners, affiliates or employees may purchase or sell for the
Sub-Advisers or such partner's, affiliate's or employee's own accounts or for the account of any other client of the Sub-Advisers,
advisory or otherwise, or (ii) to abstain from the purchase or sale of any security for the Sub-Advisers' other clients, advisory or
otherwise, which the Investment Manager has placed on the list provided pursuant to paragraph 7(h) of this Agreement.
13. Continuance and Termination. This Agreement shall remain in full force and effect for one year from the date hereof, and is
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renewable annually thereafter by specific approval of the Directors or by vote of a majority of the outstanding voting securities of
the Fund. Any such renewal shall be approved by the vote of a majority of the Directors 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 each Sub-Adviser upon 60 days written notice, and will automatically terminate in the event
of (i) its "assignment" by each party to this Agreement, as such term is defined in the ICA, subject to such exemptions as may be
granted by the Securities and Exchange Commission by rule, regulation or order, or (ii) upon termination of the Management Agreement,
provided that each Sub-Adviser has received prior written notice thereof.
14. Notification. Each Sub-Adviser will notify the Investment Manager within a reasonable time of any change in the personnel of
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the Sub-Adviser with responsibility for making investment decisions in relation to the Fund (the "Portfolio Manager(s)") or who have
been authorized to give instructions to the Custodian. The Growth Sub-Adviser will notify the Investment Manager of any changes in
the membership of its general partners within a reasonable time after such change. The Sub-Advisers shall be responsible jointly for
reasonable out-of-pocket costs and expenses incurred by the Investment Manager, the Fund or the Company to amend or supplement the
Company's Prospectus to reflect a change in Portfolio Manager(s) or otherwise to comply with the ICA, the Securities Act of 1933, as
amended (the "1933 Act") or any other applicable statute, law, rule or regulation, as a result of such change; provided, however,
that the Sub-Advisers shall not be responsible for such costs and expenses where the change in Portfolio Manager(s) reflects the
termination of employment of the Portfolio Manager(s) with the Sub-Advisers and their affiliates or is the result of a request by the
Investment Manager or is due to other circumstances beyond the Sub-Advisers' control.
Any notice, instruction or other communication required or contemplated by this Agreement shall be in writing. All such
communications shall be addressed to the recipient at the address set forth below, provided that either party may, by notice,
designate a different recipient and/or address for such party.
Investment Manager: American Skandia Investment Services, Incorporated
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Senior Vice President & Chief Operating Officer
Value Sub-Adviser: Xxxxxxx X. Xxxxxxxxx & Co., LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxx Xxxxx
With Copy to: Xxxxx X. Xxxxxx, Senior Vice President and Counsel
Growth Sub-Adviser: Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
With Copy to: Xxxx X. Xxxxxx, Senior Vice President and Counsel
Company: American Skandia Advisor Funds, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
15. Indemnification. The Sub-Advisers, jointly and severally, agree to indemnify and hold harmless the Investment Manager, any
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affiliated person within the meaning of Section 2(a)(3) of the ICA ("affiliated person") of the Investment Manager and each person,
if any who, within the meaning of Section 15 of the 1933 Act, controls ("controlling person") the Investment Manager, against any and
all losses, claims, damages, liabilities or litigation (including reasonable legal and other expenses), to which the Investment
Manager or such affiliated person or controlling person of the Investment Manager may become subject under the 1933 Act, the ICA, the
Advisers Act, under any other statute, law, rule or regulation at common law or otherwise, arising out of either Sub-Adviser's
responsibilities hereunder (1) to the extent of and as a result of the willful misconduct, bad faith, or gross negligence by such
Sub-Adviser, any of the Sub-Advisers' employees or representatives or any affiliate of or any person acting on behalf of such
Sub-Adviser, or (2) as a result of any untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, including any amendment thereof or any supplement thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement therein not misleading, if such a statement or omission was
made in reliance upon and in conformity with written information furnished by either Sub-Adviser to the Investment Manager, the Fund,
the Company or any affiliated person of the Investment Manager, the Fund or the Company or upon verbal information confirmed by such
Sub-Adviser in writing, or (3) to the extent of, and as a result of, the failure of either Sub-Adviser to execute, or cause to be
executed, portfolio investment transactions according to the requirements of the ICA; provided, however, that in no case is the
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Sub-Adviser's joint and several indemnity in favor of the Investment Manager or any affiliated person or controlling person of the
Investment Manager deemed to protect such person against any liability to which any such person would otherwise be subject by reason
of willful misconduct, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
The Investment Manager agrees to indemnify and hold harmless each Sub-Adviser, any affiliated person of each Sub-Adviser and
each controlling person of each Sub-Adviser, if any, against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which such Sub-Adviser or such affiliated person or controlling person of each
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act, under any other statute, law, rule or regulation, at
common law or otherwise, arising out of the Investment Manager's responsibilities as investment manager of the Fund (1) to the extent
of and as a result of the willful misconduct, bad faith, or gross negligence by the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting on behalf of the Investment Manager, or (2) as a
result of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including any
amendment thereof or any supplement thereto or the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, if such a statement or omission was made other than in
reliance upon and in conformity with written information furnished by either Sub-Adviser, or any affiliated person of such
Sub-Adviser or other than upon verbal information confirmed by such Sub-Adviser in writing; provided, however, that in no case is the
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Investment Manager's indemnity in favor of such Sub-Adviser or any affiliated person or controlling person of each Sub-Adviser deemed
to protect such person against any liability to which any such person would otherwise be subject by reason of willful misconduct, bad
faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under
this Agreement. It is agreed that the Investment Manager's indemnification obligations under this Section 15 will extend to expenses
and costs (including reasonable attorneys fees) incurred by either Sub-Adviser as a result of any litigation brought by the
Investment Manager alleging such Sub-Adviser's failure to perform its obligations and duties in the manner required under this
Agreement unless judgment is rendered for the Investment Manager.
16. Conflict of Laws. The provisions of this Agreement shall be subject to all applicable statutes, laws, rules and
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regulations, including, without limitation, the applicable provisions of the ICA and rules and regulations promulgated thereunder.
To the extent that any provision contained herein conflicts with any such applicable provision of law or regulation, the latter shall
control. The terms and provisions of this Agreement shall be interpreted and defined in a manner consistent with the provisions and
definitions of the ICA. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall continue in full force and effect and shall not be affected by such invalidity.
17. Amendments, Waivers, etc. Provisions of this Agreement may be changed, waived, discharged or terminated only by an
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instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. This
Agreement (including Exhibit A hereto) may be amended at any time by written mutual consent of the parties, subject to the
requirements of the ICA and rules and regulations promulgated and orders granted thereunder.
18. Governing State Law. This Agreement is made under, and shall be governed by and construed in accordance with, the laws of
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the State of Connecticut.
(Balance of Page Left Blank Intentionally)
19. Severability. Each provision of this Agreement is intended to be severable. If any provision of this Agreement is held to
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be illegal or made invalid by court decision, statute, rule or otherwise, such illegality or invalidity will not affect the validity
or enforceability of the remainder of this Agreement.
The effective date of this Agreement is March 1, 2001.
FOR THE INVESTMENT MANAGER:
AMERICAN SKANDIA INVESTMENT SERVICES, INCORPPRATED
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Xxxx Xxxxx
Senior Vice President & Chief Operating Officer
Date: ____________________________
Attest: ____________________________
FOR THE VALUE SUB-ADVISER:
XXXXXXX X. XXXXXXXXX & CO., LLC
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Name:
Title:
Date: ____________________________
Attest: ____________________________
FOR THE GROWTH SUB-ADVISER:
ALLIANCE CAPITAL MANAGEMENT L.P.
BY: Alliance Capital Management
Corporation, its General Partner
Xxxx X. Xxxxxx
Assistant Secretary
Date: ____________________________
Attest: ____________________________
American Skandia Advisor Funds, Inc.
ASAF Alliance/Xxxxxxxxx Growth + Value Fund
Sub-Advisory Agreement
EXHIBIT A
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The following annual rate is applicable to the Growth Sub-Adviser:
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An annual rate equal to .40% of the combined average daily net assets of the Growth Portfolio of the Fund and the Growth
Portfolio of the series of American Skandia Trust that is managed by the Sub-Adviser and identified by the Sub-Adviser and the
Investment Manager as being similar to the Fund (specifically, the Growth portion of the AST Alliance/Xxxxxxxxx Growth + Value
Portfolio).
The following annual rate is applicable to the Value Sub-Adviser:
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An annual rate equal to .40% of the combined average daily net assets of the Value Portfolio of the Fund and the Value
Portfolio of the series of American Skandia Trust that is managed by the Sub-Adviser and identified by the Sub-Adviser and the
Investment Manager as being similar to the Fund (specifically, the Value portion of the AST Alliance/Xxxxxxxxx Growth + Value
Portfolio).
