AMERICAN SKANDIA ADVISOR FUNDS, INC.
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT is made this 11th day of November, 2002 by and between American Skandia Advisor Funds, Inc., a Maryland
corporation (the "Company"), and American Skandia Investment Services, Incorporated, a Connecticut corporation (the
"Investment Manager").
W I T N E S S E T H
WHEREAS, the Company is registered as an open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"), and the rules and regulations promulgated thereunder; 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 Company and the Investment Manager desire to enter into an agreement to provide for the management of the
assets of the XXXX Xxxxxxx Xxxxx Concentrated Growth Fund (the "Fund") on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree as follows:
1. Management. The Investment Manager shall act as investment manager for the Fund and shall, in such capacity,
manage the investment operations of the Fund, including the purchase, retention, disposition and lending of securities,
subject at all times to the policies and control of the Board of Directors of the Company (the "Directors"). The
Investment Manager shall give the Fund the benefit of its best judgments, efforts and facilities in rendering its
services as investment manager.
2. Duties of Investment Manager. In carrying out its obligation under paragraph 1 hereof, the Investment Manager
shall:
(a) supervise and manage all aspects of the Fund's operations:
(b) provide the Fund or obtain for it, and thereafter supervise, such executive, administrative, clerical and
shareholder servicing services as are deemed advisable by the Directors;
(c) arrange, but not pay for, the periodic updating of prospectuses and supplements thereto, proxy material, tax
returns, reports to the Fund's shareholders, reports to and filings with the Securities and Exchange Commission, state
Blue Sky authorities and other applicable regulatory authorities;
(d) provide to the Directors on a regular basis, written financial reports and analyses on the Fund's securities
transactions and the operations of comparable investment companies;
(e) determine what issuers and securities shall be represented in the Fund's portfolio and regularly report them
in writing to the Directors;
(f) formulate and implement continuing programs for the purchases and sales of the securities of such issuers
and regularly report in writing thereon to the Directors; and
(g) take, on behalf of the Fund, all actions which appear to the Company necessary to carry into effect such
purchase and sale programs and supervisory functions as aforesaid, including the placing of orders for the purchase and
sale of portfolio securities.
3. Broker-Dealer Relationships. The Investment Manager is responsible for decisions to buy and sell securities for
the Fund, broker-dealer selection, and negotiation of the Fund's brokerage commission rates. The Investment Manager
shall determine the securities to be purchased or sold by the Fund 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 Company's
Prospectus and Statement of Additional Information as in effect from time to time (together, the "Registration
Statement"), or as the Directors may determine from time to time. Generally, the Investment Manager's primary
consideration in placing Fund securities transactions with broker-dealers for execution will be to obtain, and maintain
the availability of, best execution at the best available price. The Investment Manager may consider sale of the shares
of the Fund in allocating Fund securities transactions, subject to the requirements of best net price available and most
favorable execution.
Consistent with this policy, the Investment Manager, in allocating Fund securities transactions, 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 Investment Manager shall have discretion to effect
investment transactions for the Fund through broker-dealers (including, to the extent permissible under applicable law,
broker-dealers affiliated with the Investment Manager) 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 Investment Manager determines 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 Investment Manager's overall responsibilities with respect
to the Fund and other accounts as to which the Investment Manager exercises investment discretion (as such term is
defined in section 3(a)(35) of the 1934 Act). Allocation of orders placed by the Investment Manager on behalf of the
Fund to such broker-dealers shall be in such amounts and proportions as the Investment Manager shall determine in good
faith in conformity with its responsibilities under applicable laws, rules and regulations. The Investment Manager will
report on such allocations to the Directors regularly as requested by the Directors, indicating the broker-dealers to
whom such allocations have been made and the basis therefor.
4. Control by the Directors. Any investment program undertaken by the Investment Manager pursuant to this
Agreement, as well as any other activities undertaken by the Investment Manager on behalf of the Company pursuant hereto,
shall at all times be subject to any directives of the Directors.
5. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, the Investment
Manager shall at all times conform to:
(a) all applicable provisions of the ICA and the Advisers Act and any rules and regulations adopted thereunder;
and
(b) the provisions of the Registration Statement, including the investment objectives, policies and
restrictions, and permissible investments specified therein; and
(c) the provisions of the Articles of Incorporation of the Company, as amended; and
(d) the provisions of the By-laws of the Company, as amended; and
(e) any other applicable provisions of state and federal law.
6. Expenses. The expenses connected with the Company shall be allocable between the Company and the Investment
Manager as follows:
(a) The Investment Manager shall furnish, at its expense and without cost to the Company, the services of a
President, Secretary, and one or more Vice Presidents of the Company, to the extent that such additional officers may be
required by the Company for the proper conduct of its affairs.
(b) The Investment Manager shall further maintain, at its expense and without cost to the Company, a trading
function in order to carry out its obligations under subparagraphs (e), (f) and (g) of paragraph 2 hereof to place orders
for the purchase and sale of portfolio securities for the Fund.
(c) Nothing in subparagraph (a) hereof shall be construed to require the Investment Manager to bear:
(i) any of the costs (including applicable office space, facilities and equipment) of the services of a
principal financial officer of the Company whose normal duties consist of maintaining the financial
accounts and books and records of the Company, including the reviewing of calculations of net asset
value and preparing tax returns; or
(ii) any of the costs (including applicable office space, facilities and equipment) of the services of
any of the personnel operating under the direction of such principal financial officer.
Notwithstanding the obligation of the Company to bear the expense of the functions referred to in clauses (i) and
(ii) of this subparagraph (c), the Investment Manager may pay the salaries, including any applicable employment or
payroll taxes and other salary costs, of the principal financial officer and other personnel carrying out such functions,
and the Company shall reimburse the Investment Manager therefor upon proper accounting.
(d) All of the ordinary business expenses incurred in the operations of the Company and the offering of its
shares shall be borne by the Company unless specifically provided otherwise in this paragraph 6. These expenses include,
but are not limited to: (i) brokerage commissions, legal, auditing, taxes or governmental fees; (ii) the cost of
preparing share certificates; (iii) custodian, depository, transfer and shareholder service agent costs; (iv) expenses of
issue, sale, redemption and repurchase of shares; (v) expenses of registering and qualifying shares for sale; (vi)
insurance premiums on property or personnel (including officers and directors if available) of the Company which inure to
the Company's benefit; (vii) expenses relating to director and shareholder meetings; (viii) the cost of preparing and
distributing reports and notices to shareholders; (ix) the fees and other expenses incurred by the Company in connection
with membership in investment company organizations; and (x) and the cost of printing copies of prospectuses and
statements of additional information, as well as any supplements thereto, distributed to shareholders.
7. Delegation of Responsibilities. Upon the request of the Directors, the Investment Manager may perform services
on behalf of the Company which are not required by this Agreement. Such services will be performed on behalf of the
Company and the Investment Manager's cost in rendering such services may be billed monthly to the Company, subject to
examination by the Company's independent accountants. Payment or assumption by the Investment Manager of any Company
expense that the Investment Manager is not required to pay or assume under this Agreement shall not relieve the
Investment Manager of any of its obligations to the Company nor obligate the Investment Manager to pay or assume any
similar Company expense on any subsequent occasion.
8. Engagement of Sub-Advisers and Broker-Dealers. The Investment Manager may engage, subject to approval of the
Directors and where required, the shareholders of the Fund, a sub-adviser to provide advisory services in relation to the
Fund. Under such sub-advisory agreement, the Investment Manager may delegate to the sub-adviser the duties outlined in
subparagraphs (e), (f) and (g) of paragraph 2 hereof.
9. Compensation. The Company shall pay the Investment Manager in full compensation for services rendered hereunder
an annual investment advisory fee. The fee shall be payable monthly in arrears, based on the average daily net assets of
the Fund for each month, at the annual rate set forth in Exhibit A to this Agreement.
10. Non-Exclusivity. The services of the Investment Manager to the Fund are not to be deemed to be exclusive, and
the Investment Manager shall be free to render investment advisory and corporate administrative or other services to
others (including other investment companies) and to engage in other activities. It is understood and agreed that
officers or directors of the Investment Manager may serve as officers or directors of the Company, and that officers or
directors of the Company may serve as officers or directors of the Investment Manager to the extent permitted by law; and
that the officers and directors of the Investment Manager are not prohibited from engaging in any other business activity
or from rendering services to any other person, or from serving as partners, officers or directors of any other firm or
corporation, including other investment companies.
11. Term and Approval. This Agreement shall become effective on November 11, 2002 and by shall continue in force and
effect from year to year, provided that such continuance is specifically approved at least annually by:
(a) the Directors or the vote of a majority of the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the ICA); and
(b) the affirmative vote of a majority of the Directors who are not parties to this Agreement or interested
persons of a party to this Agreement (other than as Company directors), by votes cast in person at a meeting specifically
called for such purpose.
12. Termination. This Agreement may be terminated at any time without the payment of any penalty or prejudice to the
completion of any transactions already initiated on behalf of the Fund, by vote of the Directors or by vote of a majority
of the Fund's outstanding voting securities, or by the Investment Manager, on sixty (60) days' written notice to the
other party. The notice provided for herein may be waived by either party. This Agreement automatically terminates in
the event of its "assignment," as such term is defined in the ICA.
13. Liability of Investment Manager and Indemnification. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part of the Investment Manager or any of its
officers, directors or employees, it shall not be subject to liability to the Company or to any shareholder of the Fund
for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
14. Liability of the Directors and Shareholders. A copy of the Articles of Incorporation of the Company is on file
with the Secretary of the State of Maryland, and notice is hereby given that this instrument is executed on behalf of the
Directors as directors and not individually and that the obligations of this instrument are not binding upon any of the
Directors or shareholders individually but are binding only upon the assets and property of the Company. Federal and
state laws impose responsibilities under certain circumstances on persons who act in good faith, and therefore, nothing
herein shall in any way constitute a waiver of limitation of any rights which the Company or the Investment Manager may
have under applicable law.
15. Notices. Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage paid to
the other party at such address as such other party may designate for the receipt of such notice. Until further notice,
it is agreed that the address of the Company and the Investment Manager shall be Xxx Xxxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxxx 00000.
16. Questions of Interpretation. 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 ICA, shall be resolved by reference to such term or
provision of the ICA 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 Securities and Exchange Commission issued
pursuant to the ICA. In addition, where the effect of a requirement of the ICA, reflected in any provision of this
Agreement, is released by rules, regulation or order of the Securities and Exchange 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 Agreement to be executed in duplicate by their respective
officers on the day and year first above written.
AMERICAN SKANDIA ADVISOR FUNDS, INC.
Attest: By: ________________________________________
Xxxxxxx X. Xxxx
___________________________________ Vice President
AMERICAN SKANDIA INVESTMENT
SERVICES, INCORPORATED
Attest: By: ________________________________________
Xxxx Xxxxx
___________________________________ Senior Vice President & Chief Operating Officer
American Skandia Advisor Funds, Inc.
XXXX Xxxxxxx Xxxxx Concentrated Growth Fund
Investment Management Agreement
EXHIBIT A
An annual rate of 1.00% of the average daily net assets of the Fund.
