AMERICAN SKANDIA ADVISOR FUNDS, INC.
SUB-ADVISORY AGREEMENT
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THIS AGREEMENT is between American Skandia Investment Services, Incorporated and Prudential Investments LLC (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 May 1, 2003, 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
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the Fund 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-Advisor and the Investment Manager
understand and agree that if the Investment Manager manages the Fund 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 Company'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 Company'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 Company 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 Fund or the Company with respect to transactions in securities for the Fund's portfolio or any other
transactions of Fund assets. The Sub-Advisor further acknowledges that it shall not consult with any other sub-advisor
of the Fund that is a principal underwriter or an affiliated person of a principal underwriter with respect to
transactions in securities for the Fund's portfolio or any other transactions of Fund assets, and that its investment
advisory responsibilities as set forth in this Agreement are limited to such discrete portion of the Fund's portfolio as
determined by the Investment Manager.
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
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facilities, 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,
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the 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
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and 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
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monthly, 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
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rate. The 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,
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correct and 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
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the Fund and 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,
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correct 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)
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it is 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
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obligations 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
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partners or 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
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hereof, and is 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
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personnel of 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
Gateway Center Three
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Executive Vice President
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: Law Department
15. Indemnification. The Sub-Advisers, jointly and severally, agree to indemnify and hold harmless the Investment
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Manager, any 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 Sub-Adviser's joint and several
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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
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in no case is the 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
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an 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,
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the laws of 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
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is held to 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 May 1, 2003.
FOR THE INVESTMENT MANAGER:
AMERICAN SKANDIA INVESTMENT SERVICES, INCORPORATED and PRUDENTIAL INVESTMENTS LLC
___________________________________
Xxxxxx X. Xxxxx
Executive Vice President
Date: ____________________________
Attest: ____________________________
FOR THE VALUE SUB-ADVISER:
XXXXXXX X. XXXXXXXXX & CO., LLC
___________________________________
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).
