DEFINITIVE PROXY
Investment Company Act No. 811-5186
As filed with the Securities and Exchange Commission on February 14, 2003
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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
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American Skandia Trust
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Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set
forth the amount on which the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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February 20, 2003
Dear Shareholder:
We are writing to inform you that a Special Meeting of Shareholders of the portfolios (the "Portfolios") of the
American Skandia Trust (the "Trust") will be held on April 3, 2003 at 10:00 a.m. Eastern Standard Time at One Corporate
Drive, Shelton, Connecticut 06484. The Meeting has been called in order to vote on a number of important issues. As a
shareholder of the Portfolios, you have the opportunity to voice your opinion on these matters.
On December 19, 2002, Skandia Insurance Company Ltd., the parent of American Skandia, Inc. ("ASI") entered into a
stock purchase agreement to sell ASI and all of ASI's businesses, including American Skandia Investment Services, Inc
("ASISI"), the investment advisor to the Portfolios, to Prudential Financial, Inc. ("Prudential") (the "Transaction").
Prudential, located at 751 Broad Street, Newark, New Jersey 07102, serves retail and institutional customers worldwide
and includes The Prudential Insurance Company of America, one of the largest life insurance companies in the United
States. Consummation of the Transaction is subject to a number of contingencies, including regulatory and shareholder
approvals and other closing conditions. ASI's goal is to close the Transaction during the second quarter of 2003.
Because of the Transaction, it is necessary for the shareholders of each of the Portfolios for which ASISI acts
as investment manager, including your Portfolio, to approve a new investment management agreement so that the management
of each Portfolio can continue uninterrupted after the Transaction, because the current investment management agreements
will terminate automatically upon completion of the Transaction. In the event the Transaction is not completed, ASISI
will continue to manage the Portfolios pursuant to the current investment management agreements, which will continue in
full force and effect in accordance with their respective terms. The following important facts about the Transaction are
outlined below:
o The Transaction will have no effect on the number of shares you own, the value of those shares, or your
Portfolio's investment objectives.
o The investment management fee applicable to your Portfolio under the new investment management agreement will be
the same as that currently in effect.
o Your Fund's investment management agreement will be with ASISI and Prudential Investments LLC as co-managers of
your Portfolio.
o The members of your Portfolio's Board, including those members who are not affiliated with ASI or Prudential,
have carefully reviewed the proposed Transaction and unanimously recommend that you vote in favor of the new
investment management agreement.
You are also being asked to approve certain other matters, including the election of Trustees to serve on your
Portfolio's Board. Each proposal is set forth in the enclosed Notice of Special Meeting of Shareholders. Please take the
time to read the enclosed materials.
We have enclosed a Question & Answer document that discusses the proposals that require shareholder approval. The Proxy
Statement itself provides greater detail about the proposals, why they are being made and how they apply to your
Portfolio. We urge you to please take a moment to look over the enclosed materials and cast your vote in favor of each
proposal. By voting your shares, you will help us eliminate the possibility of additional expenses incurred from further
solicitation efforts.
Your vote is important to us. Please take a moment after reviewing the enclosed materials to sign and return your proxy
card in the enclosed postage paid return envelope, or take advantage of the electronic voting procedures described in the
Proxy Statement and proxy cards. It is important that we receive your vote as early as possible and no later than the
time of the Meeting on April 3.
If you have any questions regarding the enclosed material or the execution of your vote, please call the Trust toll free
at 1-800-SKANDIA. We appreciate your time and continued commitment to the American Skandia Trust.
Sincerely,
Wade A. Dokken
Chief Executive Officer and Chairman of the Board
American Skandia Trust
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IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSALS
While we encourage you to read the fully text of the enclosed Proxy Statement, we are also providing you with a brief overview of the
subject of the shareholder vote. Your vote is important.
Questions & Answers
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Q: Why am I receiving these proxy materials?
A: As a shareholder of one or more of the Portfolios of the American Skandia Trust, you are being asked to vote on a
variety of proposals at a Special Meeting of Shareholders that will be held on April 3, 2003 at 10:00 a.m. Eastern
Standard Time at One Corporate Drive, Shelton, Connecticut 06484.
Q: What will I be asked to vote on?
A: You will be asked to approve a new investment management agreement for your Portfolio, to elect Trustees to serve on
your Portfolio's Board of Trustees, and to approve changes in certain Portfolio fundamental investment restrictions.
Q: What is happening between American Skandia and Prudential?
A: On December 19, 2002, Skandia Insurance Company Ltd., the parent of American Skandia, Inc. ("ASI") entered into a
stock purchase agreement to sell ASI and all of ASI's businesses, including American Skandia Investment Services, Inc
("ASISI"), the investment advisor to the Portfolios, to Prudential Financial, Inc. ("Prudential") (the "Transaction").
Prudential, located at 751 Broad Street, Newark, New Jersey 07102, serves retail and institutional customers worldwide
and includes The Prudential Insurance Company of America, one of the largest life insurance companies in the United
States. Consummation of the Transaction is subject to a number of contingencies, including regulatory and shareholder
approvals and other closing conditions. ASI's goal is to close the Transaction during the second quarter of 2003.
Q: Why am I being asked to vote on the proposed new investment management agreements?
A: Because of the Transaction, it is necessary for the shareholders of each of the Portfolios for which ASISI acts as
investment manager, including your Portfolio, to approve a new investment management agreement so that the management of
each Portfolio can continue uninterrupted after the Transaction, because the current investment management agreements
will terminate automatically upon completion of the Transaction.
The Investment Company Act of 1940, which regulates mutual funds in the United States such as your Portfolio, requires a
shareholder vote to approve a new investment management agreement whenever there is a "change of control" of a fund's
investment manager. The proposed Transaction will result in such a change of control of ASISI and therefore requires
shareholder approval of a new investment management agreement.
Q: How will the Transaction affect me as a fund shareholder?
A: Your Portfolio and its investment objectives will not change as a result of the Transaction, and you would still own
the same shares in the same Portfolio.
Q: Will the fees payable under the new investment management agreements increase as a result of the Transaction?
A: No; the investment management fee rate applicable to your Portfolio under the new investment management agreement
will be the same as that currently in effect.
Q: How will the new investment management agreement differ from the current investment management agreement?
A: Your Portfolio's new investment management agreement will be with ASISI and Prudential Investments LLC as co-managers
of your Portfolio.
Q: Why am I being asked to elect Trustees?
A: You are being asked to elect as Trustees nominees who currently serve as board members of registered investment
companies managed by Prudential Investments LLC or are employed by Prudential-affiliated companies in order to facilitate
the ability of ASISI and Prudential Investments LLC as co-managers to provide efficient investment services to the
Portfolios and result in a Board that is familiar both with the Trust and the services and resources of Prudential
Investments LLC. In addition, one current Trustee, John A. Pileski, is proposed for election because he has not
previously been elected by shareholders of the Trust. Three of the six current Trustees will not stand for election.
The election of the nominees is contingent upon completion of the Transaction.
Q: Why am I being asked to change Portfolio fundamental investment restrictions?
A: A Portfolio's fundamental investment restrictions may not be changed without shareholder approval. You are being
asked to change the Portfolios' fundamental investment restrictions regarding lending and borrowing in order to implement
an interfund credit facility that will allow the Portfolios to lend money to, and borrow money, from other Portfolios.
Operation of the interfund credit facility is expected to be more economical for the Portfolios than current borrowing
from banks.
In addition, shareholders of certain Portfolios will be asked to adopt changes in the Funds' fundamental investment
restrictions including investment in single issuer, fund diversification and reclassification of "fundamental"
restrictions as "non-fundamental". These proposals are explained in detail in the Proxy Statement.
Q: How do the board members of my Portfolio recommend that I vote?
A: After careful consideration, the board members of your Portfolio's Board, including those members who are not
affiliated with American Skandia or Prudential, unanimously recommend that you vote "FOR" each of the Proposals and "FOR"
each of the nominees to serve as a Trustee.
Q: Will my Portfolio pay for this proxy solicitation?
A: No; neither you nor your Portfolio will bear any cost associated with this proxy solicitation. ASI has agreed to
bear these costs.
Q: How do I vote my shares?
A: You may choose from one of the following options as described in more detail in the proxy statement and proxy card.
o by mail, using the enclosed proxy card and postage paid return envelope;
o through the Internet, using the website address on your proxy card and proxy statement; or
o in person at the shareholder meeting.
Q: Whom should I call for additional information about this proxy statement?
A: Please call 1-800-SKANDIA.
AMERICAN SKANDIA TRUST
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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To be held
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April 3, 2003
To the Shareholders of the Portfolios of American Skandia Trust:
Notice is hereby given that a Special Meeting of Shareholders of each series (the "Portfolios") of American
Skandia Trust (the "Trust"), will be held at One Corporate Drive, Shelton, Connecticut 06484 on April 3, 2003 at 10:00
a.m. Eastern Standard Time, or at such adjourned time as may be necessary to vote (the "Meeting"), for the following
purposes:
I. For each Portfolio, to approve a new investment management agreement between the Trust, on behalf of
each Portfolio, and American Skandia Investment Services, Inc. and Prudential Investments LLC;
II. For each Portfolio, to approve the election of eight Trustees to the Trust's Board of Trustees;
III. For each Portfolio, to approve changes in the Portfolios' fundamental investment restrictions concerning
lending;
IV. For each Portfolio, to approve changes in the Portfolios' fundamental investment restrictions concerning
borrowing;
V. For certain Portfolios, to approve changes in the Portfolios' fundamental investment restrictions
concerning investment in a single issuer.
VI. For certain Portfolios, to approve changes in the Portfolios' fundamental investment restrictions with
respect to diversification; and
VII. For certain Portfolios, to approve reclassification of certain Portfolio fundamental investment
restrictions from "fundamental" to "non-fundamental".
The matters referred to above are discussed in detail in the Proxy Statement attached to this Notice. The Board
of Trustees has fixed the close of business on February 3, 2003 as the record date for determining shareholders entitled
to notice of, and to vote at, the Meeting, and only holders of record of shares at the close of business on that date are
entitled to notice of, and to vote at, the Meeting. Each share of the Portfolio is entitled to one vote on each proposal.
You are cordially invited to attend the Meeting. If you do not expect to attend, you are requested to complete,
date and sign the enclosed form of proxy and return it promptly in the envelope provided for that purpose.
Alternatively, you may vote electronically as described in the Proxy Statement. The enclosed proxy is being solicited on
behalf of the Board of Trustees.
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER SOLICITATION, WE URGE YOU TO INDICATE YOUR
VOTING INSTRUCTIONS ON THE ENCLOSED PROXY, DATE AND SIGN IT, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE, OR TAKE ADVANTAGE OF THE ELECTRONIC VOTING PROCEDURES DESCRIBED IN THE PROXY
STATEMENT AND PROXY CARD. YOU MAY REVOKE YOUR VOTING INSTRUCTIONS AT ANY TIME PRIOR TO USE. THEREFORE, BY APPEARING AT
THE MEETING, AND REQUESTING REVOCATION PRIOR TO THE VOTING, YOU MAY REVOKE THE PROXY AND YOU CAN THEN VOTE IN PERSON.
By order of the Board of Trustees
Edward P. Macdonald
Secretary
American Skandia Trust
February 20, 2003
PROXY STATEMENT
AMERICAN SKANDIA TRUST
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484
AST Strong International Equity Portfolio
AST William Blair International Growth Portfolio
AST American Century International Growth Portfolio
AST DeAM International Equity Portfolio
AST MFS Global Equity Portfolio
AST PBHG Small-Cap Growth Portfolio
AST DeAM Small-Cap Growth Portfolio
AST Federated Aggressive Growth Portfolio
AST Goldman Sachs Small-Cap Value Portfolio
AST Gabelli Small-Cap Value Portfolio
AST DeAM Small-Cap Value Portfolio
AST Goldman Sachs Mid-Cap Growth Portfolio
AST Neuberger Berman Mid-Cap Growth Portfolio
AST Neuberger Berman Mid-Cap Value Portfolio
AST Alger All-Cap Growth Portfolio
AST Gabelli All-Cap Value Portfolio
AST T. Rowe Price Natural Resources Portfolio
AST Alliance Growth Portfolio
AST MFS Growth Portfolio
AST Marsico Capital Growth Portfolio
AST Goldman Sachs Concentrated Growth Portfolio
AST DeAM Large-Cap Growth Portfolio
AST DeAM Large-Cap Value Portfolio
AST Alliance/Bernstein Growth + Value Portfolio
AST Sanford Bernstein Core Value Portfolio
AST Cohen & Steers Realty Portfolio
AST Sanford Bernstein Managed Index 500 Portfolio
AST American Century Income & Growth Portfolio
AST Alliance Growth and Income Portfolio
AST MFS Growth with Income Portfolio
AST INVESCO Capital Income Portfolio
AST DeAM Global Allocation Portfolio
AST American Century Strategic Balanced Portfolio
AST T. Rowe Price Asset Allocation Portfolio
AST T. Rowe Price Global Bond Portfolio
AST Federated High Yield Portfolio
AST Lord Abbett Bond-Debenture Portfolio
AST DeAM Bond Portfolio
AST PIMCO Total Return Bond Portfolio
AST PIMCO Limited Maturity Bond Portfolio
AST Money Market Portfolio
SPECIAL MEETING OF SHAREHOLDERS
To be held
April 3, 2003
This proxy statement and enclosed form of proxy are being furnished in connection with the solicitation of
proxies by the Board of Trustees of American Skandia Trust (the "Trust") for use at a special meeting of the shareholders
of the various investment portfolios of the Trust (each a "Portfolio" and collectively the "Portfolios") to be held at
One Corporate Drive, Shelton, Connecticut 06484 on April 3, 2003, at 10:00 a.m. Eastern Standard Time, (the "Meeting"),
or at any adjournments thereof, for the purposes set forth in the accompanying Notice of Meeting (the "Notice"). The
first mailing of proxies and proxy statements to shareholders is anticipated to be on or about February 24, 2003.
Voting Matters
You may vote by indicating voting instructions on the enclosed proxy (or proxies), and returning it in the
envelope provided, or you may vote over the Internet by visiting www.americanskandia.com, looking for the "Vote" link and
following the instructions provided. Voting instructions will be solicited principally by mailing this Proxy Statement
and its enclosures, but proxies also may be solicited by telephone, facsimile, through electronic means such as e-mail,
or in person by officers or representatives of the Trust or American Skandia Life Assurance Corporation ("ASLAC"). The
Trust will forward proxy materials to record owners for any beneficial owners that such record owners may request. The
costs of the Meeting, including costs related to preparing and mailing this Proxy Statement will be borne by American
Skandia, Inc. ("ASI").
The following table sets forth each Proposal, as well as the Portfolios that will vote on the Proposal.
Proposal Portfolios
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I. Approval of New Investment All Portfolios
Management Agreements
II. Election of Seven Trustees All Portfolios
III. Approval of Changes to All Portfolios
Fundamental Investment
Restrictions With Respect to
Lending Activities of Portfolios
IV. Approval of Changes to All Portfolios
Fundamental Investment
Restrictions With Respect to
Borrowing Activities of
Portfolios
V. Approval of Changes to AST Alliance Growth and Income Portfolio, AST INVESCO Capital Income Portfolio and
Fundamental Investment AST Goldman Sachs Concentrated Growth Portfolio (the "Proposal V Voting
Restrictions With Respect to Portfolios")
Investments in a Single Issuer
VI. Approval of Changes to AST Goldman Sachs Concentrated Growth Portfolio and AST Goldman Sachs Mid-Cap
Fundamental Investment Growth Portfolio (the "Proposal VI Voting Portfolios")
Restrictions With Respect to
Diversification
VII. Approval of Reclassification of AST Alliance Growth and Income Portfolio, AST INVESCO Capital Income Portfolio,
Certain Fundamental Investment AST Federated High Yield Portfolio, AST PIMCO Total Return Bond Portfolio, AST
Restrictions from "Fundamental" PIMCO Limited Maturity Bond Portfolio and AST Money Market Portfolio (the
to "Non-fundamental" "Proposal VII Voting Portfolios")
The Annual Report of the Trust, including audited financial statements for the fiscal year ended December 31,
2001, and the Semi-Annual Report of the Trust for the period ended June 30, 2002, have been previously sent to
shareholders. The Trust will furnish additional copies of the Annual Report and Semi-Annual Report to a shareholder upon
request, without charge, by writing to the Trust at the above address or by calling 1-800-752-6342.
Shareholders of record at the close of business on February 3, 2003 (the "Record Date") are entitled to notice
of, and to vote at, the Meeting. Each shareholder is entitled to one vote for each full share. As of the Record Date,
the shares of beneficial interest of the Portfolios outstanding, rounded to the nearest full share, were as follows:
PORTFOLIO SHARES
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AST T. Rowe Price Asset Allocation Portfolio 20,818,412.176
AST T. Rowe Price Global Bond Portfolio 19,540,305.688
AST T. Rowe Price Natural Resources Portfolio 8,431,642.280
AST Marsico Capital Growth Portfolio 89,794,781.120
AST Federated High Yield Portfolio 70,036,804.810
AST Federated Aggressive Growth Portfolio 7,747,193.569
AST Lord Abbett Bond-Debenture Portfolio 16,367,757.337
AST Alger All-Cap Growth Portfolio 88,034,422.875
AST PIMCO Limited Maturity Bond Portfolio 98,454,646.862
AST PIMCO Total Return Bond Portfolio 185,963,135.993
AST Sanford Bernstein Managed Index 500 Portfolio 48,756,488.585
AST Alliance/Bernstein Growth + Value Portfolio 4,274,870.681
AST Sanford Bernstein Core Value Portfolio 22,010,467.674
AST MFS Global Equity Portfolio 7,481,676.346
AST MFS Growth Portfolio 86,625,634.689
AST MFS Growth with Income Portfolio 11,553,638.622
AST PBHG Small-Cap Growth Portfolio 22,773,235.173
AST Goldman Sachs Concentrated Growth Portfolio 66,850,301.016
AST Goldman Sachs Mid-Cap Growth Portfolio 20,406,001.106
AST Goldman Sachs Small-Cap Value Portfolio 23,075,750.555
AST William Blair International Growth Portfolio 41,726,805.918
AST Neuberger Berman Mid-Cap Value Portfolio 55,834,565.519
AST Neuberger Berman Mid-Cap Growth Portfolio 29,605,795.968
AST American Century Income & Growth Portfolio 26,620,740.258
AST American Century Strategic Balanced Portfolio 16,024,891.860
AST American Century International Growth Portfolio 36,997,958.147
AST Gabelli Small-Cap. Value Portfolio 39,876,934.868
AST Gabelli All-Cap Value Portfolio 13,771,095.411
AST Strong International Equity Portfolio 25,809,308.069
AST Alliance Growth Portfolio 33,073,084.878
AST Alliance Growth and Income Portfolio 83,493,680.136
AST INVESCO Capital Income Portfolio 49,955,920.380
AST DeAM Global Allocation Portfolio 29,478,215.425
AST DeAM International Equity Portfolio 16,794,093.971
AST DeAM Small-Cap Growth Portfolio 55,334,201.990
AST DeAM Large Cap Value Portfolio 13,457,976.116
AST DeAM Large Cap Growth Portfolio 9,585,451.486
AST DeAM Small Cap Value Portfolio 1,653,220.146
AST DeAM Bond Portfolio 12,043,272.444
AST Cohen & Steers Realty Portfolio 17,190,421.199
AST Money Market Portfolio 2,747,749,485.170
As of the Record Date, to the knowledge of the Trust there is no beneficial owner of more than 5% of the shares
of any Portfolio of the Trust. Collectively, the Trustees and officers of the Trust own less than 1% of the Trust's
outstanding shares.
Currently, the Portfolios serve as underlying variable investment options for variable annuity contracts and
variable life insurance policies ("Variable Contracts") issued by two life insurance companies -- ASLAC and Kemper
Investors Life Insurance Company (the "Participating Insurance Companies"). As of the Record Date, more than 95% of each
Portfolio's shares were legally (rather than beneficially) owned by ASLAC. ASLAC holds assets attributable to its
Variable Contracts obligations in ASLAC Variable Account B, ASLAC Variable Account Q and ASLAC Variable Account F
(collectively, for purposes of this Proxy Statement, "ASLAC Variable Accounts"), each of which, except for ASLAC Variable
Account Q, is an investment company registered as such under the Investment Company Act of 1940, as amended (the
"Investment Company Act"). ASLAC Variable Accounts are comprised of various sub-accounts, each of which invests
exclusively in a mutual fund or in a portfolio of a mutual fund. The Participating Insurance Companies will solicit
voting instructions from variable annuity contract owners who beneficially own shares of a Portfolio through separate
accounts of the Participating Insurance Companies as of the Record Date (the "Contractowners"). Because Contractowners
are indirectly invested in the Portfolios through their contracts and have the right to instruct the Participating
Insurance Companies how to vote shares of the Portfolios on all matters requiring a shareholder vote, Contractowners
should consider themselves shareholders of the Portfolios for purposes of this Proxy Statement.
All shares of each Portfolio held by the Contractowners will be voted by the Participating Insurance Companies in
accordance with voting instructions received from such Contractowners with respect to each proposal being presented to
them as set forth in the Notice. Proxies submitted without voting instructions for any such proposal will be voted FOR
the proposal. The Participating Insurance Companies are entitled to vote shares for which no proxy is received and will
vote such shares in the same proportion as the votes cast by their Contractowners on the proxy issues presented.
Management of the Portfolios
American Skandia Investment Services, Inc. ("ASISI" or the "Investment Manager") is the investment manager for
all the Trust's Portfolios. ASISI has served as investment manager of the Trust since 1992 and currently serves as
investment manager to a total of 72 investment company portfolios. ASISI is a wholly owned subsidiary of ASI. ASI is
also the owner of ASLAC and American Skandia Marketing, Incorporated ("ASM"), which is the principal underwriter of
ASLAC's Variable Contracts. The principal offices of ASISI, ASI, ASLAC and ASM are located at One Corporate Drive,
Shelton, Connecticut 06484. ASI is indirectly owned by Skandia Insurance Company Ltd. (publ) ("SICL"), an insurance
company organized under the laws of the kingdom of Sweden, located at Sveavagen 44, S-103, Stockholm, Sweden.
ASISI serves as Investment Manager to the Portfolios pursuant to investment management agreements with the Trust
with respect to each Portfolio (the "Investment Management Agreements"). The Investment Management Agreements provide
that ASISI will furnish each Portfolio with investment advice and administrative services subject to the supervision of
the Board of Trustees and in conformity with the stated policies of the applicable Portfolios. In the case of each
Portfolio, the Investment Management Agreement also provides, among other things, that in carrying out its responsibility
to supervise and manage all aspects of the Portfolio's operations including the executive, administrative, accounting,
custody, transfer agency and shareholder servicing services that are deemed advisable by the Trustees, ASISI may engage,
subject to approval of the Board of Trustees of the Trust (the "Board" or "Trustees") and, where required, the
shareholders of the Portfolio, a sub-advisor to provide advisory services to the Portfolio. ASISI may delegate to the
sub-advisor the duty, among other things, to formulate and implement the Portfolio's investment program, including the
duty to determine what issuers and securities will be purchased for or sold from the Portfolio.
The Trust has obtained an exemption from the Securities and Exchange Commission that permits ASISI, subject to
approval by the Board of Trustees of the Trust, to enter into new sub-advisory agreements with one of more sub-advisors
or to change sub-advisors, without obtaining shareholder approval of the changes. This exemption (which is similar to
exemptions granted to other investment companies that are organized in a similar manner as the Trust) is intended to
facilitate the efficient supervision and management of the sub-advisors by ASISI and the Trustees.
In accordance with this provision for delegation of authority, ASISI has entered into a sub-advisory agreement
with respect to each Portfolio, pursuant to which the above duties have been delegated by ASISI to a sub-advisor who
receives compensation for its services from ASISI out of the investment management fee ASISI receives from each
Portfolio; the sub-advisors do not receive compensation directly from any Portfolio.
The Administrator of the Portfolios is PFPC Inc., a Delaware corporation located at 103 Bellevue Parkway,
Wilmington, Delaware 19809.
Acquisition of ASI by Prudential Financial, Inc.
On December 19, 2002, SICL entered into a stock purchase agreement (the "Purchase Agreement") to sell 90% of ASI
and all of ASI's businesses, including ASISI, to Prudential Financial, Inc. ("Prudential" or "Purchaser") (the
"Transaction") for $1.265 billion. The remaining 10% interest in ASI and its business will be retained by SICL, subject
to certain SICL rights to require Prudential to purchase its remaining interest and certain Prudential rights to purchase
such remaining interest from SICL on demand. Prudential, 751 Broad Street, Newark, New Jersey 07102, serves retail and
institutional customers worldwide and includes The Prudential Insurance Company of America, one of the largest life
insurance companies in the U.S. Prudential companies offer a variety of products and services, including life insurance,
property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration,
asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation
services. The Prudential companies had approximately $557 billion in total assets under management and administration as
of September 30, 2002. Consummation of the Transaction is subject to a number of contingencies, including receipt of
regulatory and shareholder approvals and satisfaction of other closing conditions. The goal of ASI and Prudential is to
complete the Transaction during the second quarter of 2003 (the "Closing"). Under the Purchase Agreement, among the
other conditions to Prudential's obligations to complete the Transaction is the condition that shareholder approvals
shall have been received and shall be in full force and effect with respect to investment companies (and each series
thereof) registered as investment companies under the Investment Company Act for which ASI or any of its subsidiaries
acts as investment advisor, administrator or sub-advisor having not less than 75% of such funds' assets under management
as of the consummation date of the Transaction.
ASISI does not expect that the Trust's operations will be materially affected, at least immediately, by the
Transaction. ASISI does not currently anticipate that there will be any immediate changes in the sub-advisors engaged by
the Trust in connection with the Transaction. ASI and Prudential are beginning the process of evaluating capabilities
across the ASI and Prudential companies, including ASISI, and, where appropriate, considering changes designed to
maximize investment and operations capabilities and achieve expense and resource efficiencies to be implemented following
the Transaction.
Summary of Proposals
Shareholders of the Portfolios are being asked to consider and vote on the seven Proposals set forth in the
Notice and described in more detail below. As described above under "Voting Matters", some of the Proposals relate to
some, but not all, Portfolios.
o Under Proposal I, the shareholders of each Portfolio are being asked to approve a new investment management
agreement between the Trust, on behalf of the Portfolios, and ASISI, and Prudential Investments LLC ("PI"), as
co-managers. If approved by the shareholders of each Portfolio, the new investment management agreement would
provide for the uninterrupted management of each Portfolio after the Transaction, because the separate current
Investment Management Agreement for each Portfolio with ASISI will terminate automatically upon completion of the
Transaction.
o Under Proposal II, the shareholders of each Portfolio are being asked to elect eight Trustees to the Board of
Trustees of the Trust to serve until their respective successors have been elected and qualified (the "Nominees").
o Under Proposal III, the shareholders of each Portfolio are being asked to approve changes to each Portfolio's
fundamental investment restriction with respect to the lending activities of the Portfolios that would allow a
Portfolio to lend money directly to another Portfolio. Currently, each Portfolio is permitted to lend portfolio
securities to certain borrowers pursuant to the Trust's securities lending program. It is proposed that the current
fundamental investment restriction be broadened to explicitly allow the lending of money between Portfolios in order
to implement the operation of an interfund credit facility pursuant to which the Portfolios could lend money to each
other (the "Interfund Credit Facility"). If approved by the shareholders of a Portfolio, the fundamental investment
restriction would be amended to allow such interfund lending of money in addition to the lending activities that are
permissible under the current fundamental investment restriction.
o Under Proposal IV, the shareholders of each Portfolio are being asked to approve changes to each Portfolio's
fundamental investment restriction with respect to the borrowing activities of the Portfolios that would allow a
Portfolio to borrow money from another Portfolio. Currently, each Portfolio is permitted to borrow money for
temporary or emergency purposes only from banks or other persons as permitted by applicable law. In order to
implement the operation of the Interfund Credit Facility, it is proposed that the current fundamental investment
restriction be broadened to explicitly allow a Portfolio to borrow money from another Portfolio. If approved by the
shareholders of a Portfolio, the fundamental investment restriction would be amended to allow such borrowing of money
from other Portfolios in addition to the borrowing arrangements that are permissable under the current fundamental
investment restriction.
o Under Proposal V, the shareholders of each of the Proposal V Voting Portfolios are being asked to approve changes
to each Proposal V Voting Portfolio's fundamental investment restriction with respect to investment by a Portfolio in
a single issuer. It is proposed that these fundamental investment restrictions be amended in order to implement the
operation of a cash sweep and securities lending cash collateral management program to invest the Portfolios'
uninvested cash and securities lending cash collateral in affiliated unregistered and registered money market funds
(the "Cash Sweep and Securities Lending Cash Collateral Management Program"). Pursuant to the Cash Sweep and
Securities Lending Cash Collateral Management Program, a Portfolio is expected to be permitted to invest up to 25% of
its total assets in such money market funds utilized as investment vehicles under the Program (the "Money Market
Funds"). If approved by the shareholders of a Proposal V Voting Portfolio, the applicable fundamental investment
restriction would be amended to allow, among other things, investment by the Portfolio in the Money Market Funds
pursuant to the Cash Sweep and Securities Lending Cash Collateral Program.
o Under Proposal VI, the shareholders of the AST Goldman Sachs Concentrated Growth Portfolio will be asked to approve a
change in the Portfolio's fundamental investment restriction with respect to diversification such that the Portfolio
will be changed from a "diversified" fund to a "non-diversified" fund, as defined in the Investment Company Act, and
the shareholders of the AST Goldman Sachs Mid-Cap Growth Portfolio will be asked to approve a change in the
Portfolio's fundamental investment restriction with respect to diversification such that the Portfolio will be
changed from a "non-diversified" fund to a "diversified" fund, as defined in the Investment Company Act. These
changes are proposed in order to accommodate the manner in which the Portfolios' current sub-advisor, Goldman Sachs
Asset Management, proposes to manage each Portfolio.
o Under Proposal VII, the shareholders of each of the Proposal VII Voting Portfolios are being asked to approve the
reclassification of certain fundamental investment restrictions from "fundamental" to "non-fundamental". Fundamental
investment restrictions may not be changed without shareholder approval while non-fundamental investment restrictions
may be changed (or eliminated) by the Trustees without shareholder approval. In certain cases, the current
fundamental restrictions proposed for reclassification reflect regulatory, business or industry conditions, practices
or requirements that are no longer in effect. In other cases, the current fundamental restrictions proposed for
reclassification reflect limitations adopted by a Portfolio's sub-advisor with respect to other funds similarly
managed by the sub-advisor. In some cases, the fundamental restrictions reflect requirements of the Investment
Company Act that would continue to apply to the subject Portfolios even if the current restrictions are eliminated.
In each case, however, the Investment Company Act does not require a fundamental investment restriction. Thus,
reclassification of these fundamental investment restrictions would reduce administrative burdens associated with the
restriction and provide additional flexibility to pursue investment policies consistent with current law without the
significant delay and expense to the Portfolios of soliciting for shareholder approval.
PROPOSAL I
APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
Shareholders of each of the Portfolios are being asked to approve a new Investment Management Agreement (the "New
Agreement") between the Trust, on behalf of each Portfolio, and ASISI, and PI, as co-managers. Approval of the New
Agreements is sought so that the management of each Portfolio can continue uninterrupted after the Transaction, because
the current Investment Management Agreements (the "Current Agreements") will terminate automatically upon completion of
the Transaction.
The goal of ASI and Prudential is to complete the Transaction during the second quarter of 2003 but satisfaction
of necessary closing conditions, including, among other things, obtaining required regulatory approvals, could defer the
completion date. As a result of the Transaction, ASI will become an indirectly owned subsidiary of Prudential. ASISI
will remain a direct wholly owned subsidiary of ASI. Under the Proposal, PI would act as a co-manager of the Trust and
each Portfolio with ASISI. As co-manager, PI would provide supervision and oversight of ASISI's investment management
responsibilities with respect to the Trust. As provided in the New Agreement, PI would be accountable to the Board for
the performance of its duties as co-manager. PI expects to also provide integration planning and related services to
ASISI. In this regard, Prudential may decide at a later date to integrate the separate legal entities of PI and ASISI
into a single entity at which time the surviving investment advisor would be responsible for providing services formerly
provided by ASISI and PI and, in return, would receive fees formerly received under the New Agreement by ASISI.
The change of ownership of ASISI resulting from the Transaction will be deemed under the Investment Company Act
to be an assignment of the Current Agreements. The Current Agreements provide for their automatic termination upon an
assignment. Accordingly, the New Agreement is proposed for approval by shareholders of each Portfolio. The single New
Agreement would replace the separate Current Agreement for each Portfolio, subject to approval of such Portfolio's
shareholders. The form of the New Agreement is attached as Exhibit A to this Proxy Statement and the description of its
terms in this section is qualified in its entirety by reference to Exhibit A.
Exhibit B attached hereto reflects the date of each Current Agreement, the rate of compensation paid to ASISI
with respect to each Portfolio, and the aggregate amount of ASISI's fee with respect to each Portfolio for the last
fiscal year. Each Current Agreement was last approved by the Board on April 11, 2002 at an in-person meeting called for
the purpose of considering the annual re-approval of the Current Agreements.
The rate of compensation paid by each Portfolio under the New Agreement will be the same as the rate paid under
the Portfolio's Current Agreement. Neither ASISI nor PI anticipate that the Transaction will cause any reduction in the
nature, scope or quality of services now provided to any Portfolio by ASISI pursuant to the Current Agreement for such
Portfolio or have any adverse effect on ASISI's ability to fulfill its obligations to the Portfolios.
Terms of the Current Agreements. Each Current Agreement provides that ASISI will furnish each Portfolio with
investment advice and certain administrative services with respect to the applicable Portfolio's assets subject to the
supervision of the Board of Trustees and in conformity with the stated policies of the applicable Portfolio.
In the case of each Portfolio, the Current Agreement provides, among other things, that in carrying out its
responsibility to supervise and manage all aspects of the Portfolio's operations, ASISI may engage, subject to approval
of the Board of Trustees of the Trust and, where required, the shareholders of the Portfolio, a sub-advisor to provide
advisory services to the Portfolio. ASISI may delegate to the sub-advisor the duty, among other things, to formulate and
implement the Portfolio's investment program, including the duty to determine what issuers and securities will be
purchased for or sold from the Portfolio. In accordance with this provision for delegation of authority, ASISI has
entered into a separate sub-advisory agreement with respect to each Portfolio, pursuant to which the above duties have
been delegated by ASISI to a sub-advisor who receives compensation for its services from ASISI out of the investment
management fee ASISI receives from each Portfolio; the sub-advisors do not receive compensation directly from any
Portfolio.
Each Current Agreement provides that neither ASISI nor its personnel shall be liable for any error of judgment or
mistake of law or for any act of omission in the administration or management of the applicable Portfolio, except for
willful misfeasance, bad faith or gross negligence in the performance of its or their duties or by reason of reckless
disregard of its or their obligations and duties under the Current Agreement.
Each Current Agreement will continue in effect from year to year, provided it is approved at least annually by a
vote of the majority of the Trustees who are not parties thereto or interested persons of any such party, cast in person
at a meeting specifically called for the purpose of voting on such approval, or by the vote of the majority of the
outstanding voting securities of each Portfolio. Each Current Agreement may be terminated without penalty on sixty days'
written notice by vote of a majority of the Board of Trustees or by ASISI, or by holders of a majority of the applicable
Portfolio's outstanding shares, and will automatically terminate in the event of its "assignment" as that term is defined
in the Investment Company Act.
New Agreement. At a meeting of the Board held in person on January 24, 2003 called for the purpose of
considering the approval of the New Agreement, the New Agreement was unanimously approved by the Board, including all of
the Trustees who are not interested parties to the New Agreement or interested persons of such parties ("Independent
Trustees"). The New Agreement, as approved by the Board, is submitted for approval by the shareholders of each
Portfolio. The New Agreement must be voted upon separately by the shareholders of each Portfolio.
If the New Agreement is approved by the shareholders of a Portfolio, it will take effect as to such Portfolio and
replace such Portfolio's Current Agreement upon the closing of the Transaction. Subject to earlier termination, the New
Agreements then will remain in effect through March 31, 2005, and will continue from year to year thereafter, provided
that such continuance is approved annually with respect to each Portfolio (i) by the Board or by the vote of the majority
of the outstanding voting securities of the particular Portfolio, and, in either case, (ii) by a majority of the
Independent Trustees.
In brief, the New Agreement specifically provides that:
o ASISI and PI jointly will administer each Portfolio's business affairs and supervise each Portfolio's
investments. Subject to Board approval, ASISI and PI may select and employ one or more sub-advisors for a
Portfolio, who will have primary responsibility for determining what investments the Portfolio will purchase,
retain and sell;
o Subject to Board approval, ASISI and PI may reallocate a Portfolio's assets among sub-advisors including (to
the extent legally permissable) affiliated sub-advisors, consistent with the Portfolio's investment objectives;
o ASISI and PI (or a sub-advisor, acting under ASISI and PI's supervision) will select brokers to effect trades
for a Portfolio (which broker may be an affiliate); and
o Each Portfolio will pay advisory fees under its New Agreement at the same advisory fee rate currently paid by
such Portfolio under the Current Agreement.
Among other things, the New Agreement clarifies that ASISI and PI may appoint multiple sub-advisors for each
Portfolio and reallocate the Portfolios' assets among the multiple sub-advisors so appointed upon Board approval only and
without seeking shareholder approval. For example, this means that a Portfolio that has allocated 100% of its assets to
one sub-advisor would be able to change the allocation to 50% to the sub-advisor and 50% to a second existing or newly
appointed sub-advisor with Board approval, but without getting shareholder approval. Alternatively, if a Portfolio has
allocated 50% of its assets to each of two sub-advisors, it would be able to change the allocation to 75% of its assets
to one sub-advisor and 25% to the other sub-advisor without seeking shareholder approval. Although the New Agreement
specifically provides for re-allocation of assets among sub-advisors, the Trust has historically taken the position that
multiple sub-advisors may be engaged for each Portfolio and that the Trust can re-allocate assets in this manner.
However, the Board believes that clarifying this matter in the investment management agreement at this time is in the
best interests of the shareholders.
In addition, PI will consider, where appropriate, recommending the appointment of affiliated sub-advisors to
manage all or a segment of a Portfolio, subject to Board and shareholder approval requirements.
Pursuant to the current sub-advisory agreements (the "Current Sub-Advisory Agreements") between ASISI and the
sub-advisors, as noted above, day-to-day management of each Portfolio is carried out by each sub-advisor engaged by ASISI
under its direct supervision. Similar to the Current Agreements, each Current Sub-Advisory Agreement will automatically
terminate at the closing of the Transaction as a result of its "assignment", and in accordance with the terms of the
Current Agreements which provide for termination of each Current Sub-Advisory Agreement upon termination of its
corresponding Current Agreement. If the New Agreement is approved by shareholders, new sub-advisory agreements (the "New
Sub-Advisory Agreements") will take effect upon closing of the Transaction. The New Sub-Advisory Agreements will reflect
the changes made in the New Agreement. Shareholders will receive information statements within ninety (90) days
following the closing of the Transaction regarding the New Sub-Advisory Agreements.
The New Agreement and the Current Agreements do not have identical provisions relating to PI's or ASISI's
liability to a Portfolio if the Portfolio should suffer a loss in connection with the performance of their duties
thereunder. Each Current Agreement provides that ASISI will be liable (jointly and severally) to a Portfolio only in the
event of ASISI's willful misfeasance, gross negligence, bad faith, or reckless disregard of its duties. The New
Agreement also provides that ASISI or PI will be liable to a Portfolio for a loss resulting from willful misfeasance, bad
faith, gross negligence or reckless disregard of their respective duties and obligations as co-managers. In addition,
the New Agreement states that PI or ASISI may be liable for a breach of its fiduciary duty to a Portfolio, up to the
amount of the Portfolio's actual damages and not to exceed the advisory fee previously paid by the Portfolio over a
certain period. The Current Agreements do not limit ASISI's liability to the Portfolios in this manner.
Any investment program undertaken by ASISI pursuant to each New Agreement, as well as any other activities
undertaken by ASISI on behalf of the applicable Portfolio pursuant thereto, shall at all times be subject to any
directives of the Board. This proposal to approve the New Agreement seeks no increase in advisory fees for any of the
Portfolios.
Information about ASISI. ASISI is a Connecticut corporation organized in 1991 and is registered as an investment
adviser with the Securities and Exchange Commission. Prior to April 7, 1995, ASISI was known as American Skandia Life
Investment Management, Inc. ASISI furnishes each Portfolio with investment advice and certain administrative services
with respect to the applicable Portfolio's assets subject to the supervision of the Board of Trustees and in conformity
with the stated policies of the applicable Portfolio.
ASISI may engage, subject to approval of the Board and, where required, the shareholders of the Portfolio, a
sub-advisor to provide advisory services to the Portfolio. ASISI may delegate to the sub-advisor the duty, among other
things, to formulate and implement the Portfolio's investment program, including the duty to determine what issuers and
securities will be purchased for or sold from the Portfolio. In accordance with this provision for delegation of
authority, ASISI has entered into a sub-advisory agreement with respect to each Portfolio, pursuant to which the above
duties were delegated by ASISI to a sub-advisor who receives compensation for its services from ASISI out of the
investment management fee ASISI receives from each Portfolio; the sub-advisors do not receive compensation directly from
any Portfolio.
ASISI is a wholly-owned subsidiary of American Skandia, Inc. ASI is also the owner of ASLAC and ASM, which
serves as the principal underwriter of ASLAC Variable Contracts. The principal offices of ASISI, ASI, ASLAC and ASM are
located at One Corporate Drive, Shelton, Connecticut 06484. ASI is indirectly owned by SICL.
The table below lists the name and principal occupation of the officers of ASISI who are also officers or
Trustees of the Trust. The address of each person is One Corporate Drive, Shelton, Connecticut 06484. Wade A. Dokken
serves as both CEO of ASISI and Board Chairman of the Trust. John Birch, Richard G. Davy, Jr., Edward P. Macdonald, J.
David Greenwald and Scott H. Rhodes serve as officers of ASISI and the Trust.
Name Position and Principal Occupation with ASISI
Wade A. Dokken Chief Executive Officer
John Birch Senior Vice President & Chief Operating Officer
Richard G. Davy, Jr. Vice President
Edward P. Macdonald Chief Counsel and Anti-Money Laundering Officer
J. David Greenwald Director of Mutual Fund Operations
Scott H. Rhodes Mutual Fund Controller
Interests of Officers and Trustees in the Transaction. Certain officers and Trustees of the Trust who are also
officers or employees of ASISI may have interests in the Transaction arising out of certain benefit programs in which
they participate. Previously granted stock options and phantom stock options issued by SICL to such officers or
employees of ASISI that have not yet vested will become vested on the earlier of their ordinary vesting date or the date
that is twelve months following the closing of the Transaction, and shall remain exercisable until the date that is
eighteen months following the closing of the Transaction. Additionally, certain officers or employees of ASISI who are
also officers or Trustees of the Trust may participate in an employee long term appreciation plan, which will vest and
become payable upon the closing of the Transaction. In connection with the closing of the Transaction, an affiliate of
ASISI also may make bonus payments to certain officers or employees of ASISI who are also officers or Trustees of the
Trust.
Certain of the Trust's officers and Trustees who are officers or employees of ASISI participate in severance
plans or have entered into agreements with ASISI or its affiliates that provide for enhanced severance benefits in the
event that they are terminated in connection with or following the closing of the Transaction. Such officers or
employees of ASISI would also be eligible for continuation of certain benefits during the severance pay and salary
continuation periods. In addition, Wade A. Dokken, Chief Executive Officer of ASISI and Chairman of the Board, has been
informed that following the completion of the Transaction, he will assume a senior position with Prudential's Insurance
Division's Office of Strategic Planning.
Exhibit C attached hereto reflects other funds for which ASISI serves as investment adviser having a similar
investment objective to certain Portfolios of the Trust, and indicates the assets of such other funds and ASISI's rate of
compensation for serving as investment adviser for such other funds. ASM, an affiliate of ASISI, receives brokerage
commissions in connection with the purchase and sale of securities held by the Portfolios. For the fiscal year ended
December 31, 2002, such commissions totaled $7,904,358.90, which was 14.68% of the Trust's aggregate brokerage
commissions paid during the fiscal year ended December 31, 2002.
Information about PI. PI serves as manager to the investment companies that comprise the Prudential mutual
funds. As of September 30, 2002, PI managed and/or administered open-end and closed-end management investment companies
with assets of approximately $84.4 billion.
PI is a wholly-owned subsidiary of PIFM HoldCo, Inc., which is a wholly-owned subsidiary of Prudential Asset
Management Holding Company, which is a wholly-owned subsidiary of Prudential. The address of PI, PIFM HoldCo and PAMHCO
is Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102. The address of Prudential is 751 Broad Street, Newark,
NJ 07102.
The table below lists the name and principal occupation of the officer in charge and the senior officers of PI.
The address of each person is Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102-4077.
Name Position and Principal Occupation with PI
Judy A. Rice Officer in Charge and President, Chief Executive Officer & Chief Operating
Officer
Robert F. Gunia Executive Vice President & Chief Administrative Officer
William V. Healey Executive Vice President, Chief Legal Officer & Secretary
Kevin B. Osborn Executive Vice President
Stephen Pelletier Executive Vice President
Lynn M. Waldvogel Executive Vice President
Keitha L. Kinne Senior Vice President
Marguerite E. H. Morrison Senior Vice President
Grace C. Torres Senior Vice President
PI manages fund investments and determines the composition of the assets of fund portfolios, including the
purchase, retention or sale of the securities and cash contained in the portfolios. PI (or a sub-advisor under PI's
supervision) is responsible for the selection of brokers and dealers (which may be affiliates of PI or the sub-advisor)
to effect all transactions, and is authorized to pay higher commissions in order to receive research services. PI
performs administrative services for the funds it manages and furnishes each fund with statistical information concerning
its investments. In general, each fund bears its own expenses pursuant to the appropriate agreement, although PI pays the
salaries of its employees who provide services to each fund.
Exhibit D attached hereto reflects other funds for which PI serves as investment adviser having similar
investment objectives to certain Portfolios of the Trust, and indicates the assets of such other funds and PI's rate of
compensation for serving as investment adviser for such other funds.
Evaluation by the Board. The Board, including the Independent Trustees, met in person on January 24, 2003 to
consider whether to approve the New Agreement and New Sub-advisory Agreements and to recommend the submission of the New
Agreement to shareholders for approval. The Independent Trustees were advised by their independent legal counsel
throughout the evaluation process and an independent financial advisor was selected by the Independent Trustees and
engaged by the Trust, at the expense of ASISI, to assist in their deliberations (the "Financial Advisor").
In preparing for the meetings, the Trustees were provided with a variety of information about Prudential, the
Transaction, PI and ASISI. The Trustees received from Prudential a summary of the material provisions of the Transaction
and Prudential's and PI's most recent financial statements, including balance sheets. The Trustees also reviewed
information concerning: (1) Prudential's organizational structure and senior personnel; and (2) Prudential's operations
and, in particular, its mutual fund advisory and distribution activities. Proposed forms of the New Agreement and New
Sub-advisory Agreements were provided to the Trustees. Senior representatives of ASISI and Prudential attended the Board
meeting to present additional information and to respond to questions by the Independent Trustees.
At the meetings, the Trustees were informed by senior representatives of Prudential and ASISI that (1) the
services to be provided by ASISI and PI under the New Agreements will be at least equal in scope and quality to those
which have been provided by ASISI to the Portfolios under the Current Agreements; (2) the investment advisory fee rate to
be paid by each Portfolio to ASISI and PI under the New Agreement will remain the same as that payable to ASISI under its
Current Agreement; (3) ASI and Prudential will each use their best efforts to avoid the imposition on the Trust or any of
the Portfolios of an "unfair burden" (as defined in the Investment Company Act) in connection with the Transaction; (4)
ASISI and PI will maintain any voluntary fee waiver or expense limitation for a Portfolio currently in effect for the
period previously discussed with the Board, although any such fee waiver or expense limitation may thereafter be
terminated by ASISI and PI; and (5) it is not expected that the Portfolios' expense ratios will increase under the New
Agreement.
In the course of their deliberations, the Trustees considered, in addition to the information described above,
(1) the similarity between the material terms and conditions of the New Agreement and the Current Agreements; (2)
Prudential's general reputation and its general intentions at that time with respect to management of the Portfolios'
investment portfolios, including possible utilization of Prudential's internal investment management and research
capabilities; (3) the potential for possible economies of scale to be realized by the Portfolios in light of existing
Prudential investment products and services; (4) the potential for enhanced distribution opportunities for the
Portfolios' shares through participation in the Trust by life insurance companies affiliated with Prudential and access to
Prudential's captive distribution force and; (5) Prudential's stated commitment to the maintenance of effective
compliance programs for the Trust and its compliance record in respect of mutual funds that it presently sponsors.
As described above, the Portfolios at present primarily serve as underlying variable investment options for
variable annuity contracts and variable life insurance policies issued by ASLAC. In their deliberations, the Trustees
considered actions during 2002 by Standard & Poor's Rating Services, Inc., Moody's Investment Services, Fitch, Inc. and
A.M. Best Company to reduce financial strength or credit ratings assigned to ASLAC or SICL and information received in
the months prior to public announcement of the Transaction from ASISI and its affiliates regarding (1) the potential
competitive impact of these rating actions on ASLAC and (2) the financial abilities of ASISI and its affiliates to
continue to provide distribution services and services to the Trust and Portfolios required by the Current Agreements
commensurate in scope and quality with those currently provided. The Trustees further considered discussions with ASISI
and SICL prior to the public announcement of the Transaction as to the Trustees' concerns in light of these developments.
The Trustees received and considered information provided by the Financial Advisor regarding Prudential,
including information as to Prudential's most recent credit and financial strength ratings, and the anticipated impact of
the Transaction upon its financial position.
Based on the foregoing information and considerations, the Board determined that the New Agreement and the New
Sub-advisory Agreements are in each Portfolio's and its shareholders' best interests. Accordingly, the Trustees,
including the Independent Trustees, unanimously voted to approve the New Agreement and New Sub-advisory Agreements for
each Portfolio and to submit the New Agreement to the shareholders of each Portfolio for approval.
The effectiveness of this Proposal I is conditioned upon consummation of the Transaction. In the event that the
Transaction is not consummated, ASISI will continue to manage each Portfolio pursuant to its Current Agreement, which
will continue in full force and effect in accordance with its terms. Shareholders of each Portfolio must separately
approve the New Agreement with respect to that Portfolio. If the shareholders of a particular Portfolio should fail to
approve the New Agreement and the Transaction is completed, the Board shall meet to consider appropriate action for that
Portfolio.
In the event that the Transaction is not completed for any reason, including the failure of the shareholders of
the Portfolios and of other investment companies for which ASI or any of its subsidiaries acts as investment adviser,
administrator or sub-advisor to approve the New Agreement as required by the Purchase Agreement, the Trustees will
consider what actions, if any, are available to the Trust to provide for continuation of high quality investment
management and distribution services to the Portfolios.
Section 15(f) of the Investment Company Act. ASI and Prudential will use their reasonable best efforts to assure
compliance with the conditions of Section 15(f) of the Investment Company Act. Section 15(f) provides a non-exclusive
safe harbor for an investment adviser or any affiliated persons thereof to receive any amount or benefit in connection
with a transaction that results in a change in control of or identity of the investment adviser to an investment company
as long as two conditions are met. First, no "unfair burden" may be imposed on the investment company as a result of the
transaction relating to the change in control, or any express or implied terms, conditions or understandings applicable
thereto. As defined in the Investment Company Act, the term "unfair burden" includes and arrangement during the two-year
period after the change in control whereby the investment advisor (or predecessor or successor adviser), or any
interested person of any such adviser, receives or is entitled to receive any compensation, directly or indirectly, from
the investment company or its security holders (other than fees for bona fide investment advisory or other services), or
from any person in connection with the purchase or sale of securities or other property to, from, or on behalf of the
investment company (other than bona fide ordinary compensation as principal underwriter of the investment company).
Second, during the three year period immediately following the change in control, at least 75% of an investment company's
board of directors must not be "interested persons" of the investment adviser or the predecessor investment adviser
within the meaning of the Investment Company Act.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF EACH PORTFOLIO VOTE "FOR" PROPOSAL
I. ANY UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL II
ELECTION OF EIGHT TRUSTEES
At the Meeting, shareholders will be asked to elect eight (8) Trustees to the Trust's Board of Trustees to hold
office until their successors are elected and qualified. All of the Nominees have consented to be named and have
indicated their intent to serve if elected. If any Nominee is unavailable for any reason, the Proxy holders will consult
with the Board of Trustees of the Trust in determining how to vote the shares represented by them.
The Board's Nominating Committee, which is comprised solely of Independent Trustees, recommended, and the full
Board approved, the nomination, subject to completion of the Transaction, of Saul K. Fenster, Delayne Dedrick Gold, W.
Scott McDonald, Jr., Thomas T. Mooney, Louis A. Weill, III, David R. Odenath, Jr., Robert F. Gunia and John A. Pileski.
As described more fully below, if elected, David R. Odenath, Jr. and Robert F. Gunia would be Interested Trustees by
virtue of their employment by PI and Prudential. The other six Nominees, if elected, would be Independent Trustees. One
of the current Trustees, John A. Pileski, was previously appointed to the Board by the other current Trustees and is a
Nominee under Proposal II because he has not previously been elected by the shareholders of the Trust. Ms. Gold and
Messrs. Fenster, McDonald, Mooney and Weill currently serve as Independent Trustees of registered management investment
companies managed by PI. The election of the Nominees other than Mr. Pileski is contingent in each case upon completion
of the Transaction. The current Trustees believe that the election of the Nominees will facilitate the ability of ASISI
and PI as co-managers to provide efficient investment services to the Portfolios and result in a Board that is familiar
with the Trust and the services and resources of each of ASISI and PI.
The Trust currently has six Trustees, five of whom are Independent Trustees, and one of whom, Wade A. Dokken, is
an Interested Trustee. Following the election of the Nominees and completion of the Transaction, it is expected that two
of the current Trustees, Wade A. Dokken and David E. A. Carson will resign. After the Transaction, Julian A. Lerner is
expected to retire from the Board of the Trust and to be appointed to serve as a non-voting Trustee Emeritus for terms
not to exceed three years in the aggregate. As described above, current Trustee John A. Pileski is a Nominee for
election by shareholders and, if elected, would continue to serve on the Board whether or not the Transaction is
completed. Proposal II will not affect the status of the other two Independent Trustees, Thomas M. O'Brien and F. Don
Schwartz, both of whom have previously been elected by shareholders on April 17, 1992, and these Trustees will continue
to hold office until they resign, retire or are removed from office and their successors are elected.
If Proposal II is approved by shareholders, upon Closing of the Transaction the Trust's Board will be comprised
of ten (10) Trustees including eight (8) Independent Trustees and two (2) Interested Trustees. In the event that the
Transaction is not completed, the current Trustees would continue in office as their successors would not have been
elected and qualified.
The table below indicates, as to each of the Nominees for election as a Trustee as well as the current Trustees
and officers of the Trust, the following information: his or her name, position with the Trust (if applicable), age,
period of time served on the Board, principal occupation during the past five years, the number of portfolios in the Fund
Complex overseen, and other directorships held in public companies.
Current Independent Trustees and Nominee:
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
Number of
Portfolios in Fund
Complex Overseen
Length of Time by
Name, Age and Address Position Served Principal Occupation During Past 5 Years Trustee/Director*
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
David E. A. Carson Trustee Trustee since Director (January 2000 to May 2000) 72
(68) April, 1992 Chairman (January 1999 to December 1999)
People's Bank Chairman and Chief Executive Officer
1 Financial Plaza, Second (January 1998 to December 1998)
Floor President, Chairman and Chief Executive
Hartford, Connecticut 06103 Officer (1983 to December 1997)
People's Bank
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Other Directorships Held: Mr. Carson has served as a Director of United Illuminating and UIL Holdings, a utility company,
since May 1993. He has also served as a Trustee of Mass Mutual Institutional Funds and Mass Mutual Series Funds, a mutual
fund company, since 1996.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
Julian A. Lerner Trustee Trustee since Retired since 1995 72
(78) November, 1996 Senior Vice President and Portfolio Manager
12850 Spurling Road Suite 208 (1986 to 1995)
Dallas, Texas 75230 AIM Charter Fund and AIM Summit Fund
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Mr. Lerner served a Director of the Idex Funds, a mutual fund company, from March 1996 until
December 1999. He served as a Director of Atlas Assets Inc., a mutual fund company, from November 1997 until March 1999.
He also served as a Trustee of Atlas Insurance Company Trust, a mutual fund company, from November 1997 until March 1999.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
Thomas M. O'Brien Trustee Trustee since President and Chief Executive Officer 72
(52) April, 1992 May 2000 to present
Atlantic Bank of New York Atlantic Bank of New York
960 Avenue of the Americas
New York, NY 10001 Vice Chairman
January 1997 to April 2000
North Fork Bank
President and Chief Executive Officer:
December 1984 to December 1996
North Side Savings Bank
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Mr. O'Brien served as a Director of North Fork Bank, a bank, from December 1996 until May 2000.
He has also served as a Director of Atlantic Bank of New York, a bank, since May 2000.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
John A. Pileski Trustee Trustee since Retired since June 2000 72
(63) and February, 2001
43 Quaquanantuck Lane Nominee Tax Partner
Quogue, NY 11959 (July 1974 to June 2000)
KPMG, LLP
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Mr. Pileski has served as a Director of New York Community Bank since April, 2001. He has also
served as a Director of Queens Museum of Art since January 1997 and as a Director of Surf Club of Quogue, Inc. since May
1980.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
F. Don Schwartz Trustee Trustee since Management Consultant 72
(67) April, 1992 (April 1985 to present)
6 Sugan Close Drive
New Hope, PA 18938
------------------------------ ---------- ---------------- ---------------------------------------------- --------------------
------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: None
------------------------------------------------------------------------------------------------------------------------------
* The Trustees are responsible for overseeing all 41 Portfolios included in the Trust, as well as the 31 Funds included
in American Skandia Advisor Funds, Inc. ("ASAF"), all of which are investment companies managed by the Investment Manager.
Proposed Independent Nominees:
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Number of
Portfolios in Fund
Complex Overseen
Length of Time by Trustee/Director
Name, Age and Address* Position Served Principal Occupation During Past 5 Years
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Saul K. Fenster, Ph.D. (69) No N/A President Emeritus (since June 2002); N/A
position President (December 1978-June 2002) of New
with Trust Jersey Institute of Technology; Commissioner
(1998-June 2002) of the Middle States
Association Commission on Higher Education;
Commissioner (since 1985) of the New Jersey
Commission on Science and Technology;
Director (since 1998) Society of
Manufacturing Engineering Education
Foundation; Director (since 1995) of
Prosperity New Jersey; formerly a director
or trustee of Liberty Science Center,
Research and Development Council of New
Jersey, New Jersey State Chamber of
Commerce, and National Action Council for
Minorities in Engineering.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Member (since 2000), Board of Directors of IDT Corporation.
-------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Delayne Dedrick Gold (64) No N/A Marketing Consultant (1982-present); N/A
position formerly Senior Vice President and Member of
with Trust the Board of Directors, Prudential Bache
Securities, Inc.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: None
-------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
W. Scott McDonald, Jr. (65) No N/A Vice President (since 1997) of Kaludis N/A
position Consulting Group, Inc. (a Sallie Mae company
with Trust serving higher education); Formerly
principal (1993-1997), Scott McDonald &
Associates, Chief Operating Officer
(1991-1995), Fairleigh Dickinson University,
Executive Vice President and Chief Operating
Officer (1975-1991), Drew University,
interim President (1988-1990), Drew
University and founding director of School,
College and University Underwriters Ltd.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: None
-------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Thomas T. Mooney (61) No N/A President of the Greater Rochester Metro N/A
position Chamber of Commerce; formerly Rochester City
with Trust Manager; formerly Deputy Monroe County
Executive; Trustee of Center for
Governmental Research, Inc.; Director of
Blue Cross of Rochester, Monroe County Water
Authority and Executive Service Corps of
Rochester.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Director, President and Treasurer (since 1986) of First Financial Fund, Inc. and Director (since
1988) of The High Yield Plus Fund, Inc.
-------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Louis A. Weil, III (61) No N/A Formerly Chairman (January 1999-July 2000), N/A
position President and Chief Executive Officer
with Trust (January 1996-July 2000) and Director (since
September 1991) of Central Newspapers, Inc.;
formerly Chairman of the Board (January
1996-July 2000), Publisher and Chief
Executive Officer (August 1991-December
1995) of Phoenix Newspapers, Inc.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: None
-------------------------------------------------------------------------------------------------------------------------------
Proposed Interested Trustee Nominees(2):
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Number of
Portfolios in Fund
Complex Overseen
Length of Time by Trustee/Director
Name, Age and Address* Position Served Principal Occupation During Past 5 Years
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
David R. Odenath, Jr. (45) No N/A President, Chief Executive Officer and Chief N/A
position Operating Officer (since June 1999) of
with Trust Prudential Investments LLC; Senior Vice
President (since June 1999) of The
Prudential Insurance Company of America;
formerly Senior Vice President (August
1993-May 1999) of PaineWebber Group, Inc.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: None
-------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
Robert F. Gunia (56) No N/A Executive Vice President and Chief N/A
position Administrative Officer (since June 1999) of
with Trust PI; Executive Vice President and Treasurer
(since January 1996) of PI; President (since
April 1999) of Prudential Investment
Management Services LLC (PIMS); Corporate
Vice President (since September 1997) of The
Prudential Insurance Company of America
(Prudential); formerly Senior Vice President
(March 1987-May 1999) of Prudential
Securities; formerly Chief Administrative
Officer (July 1989-September 1996), Director
(January 1989-September 1996) and Executive
Vice President, Treasurer and Chief
Financial Officer (June 1987-December 1996)
of PMF. Vice President and Director (since
May, 1992) of Nicholas-Applegate Fund, Inc.
------------------------------ ----------- ---------------- ---------------------------------------------- --------------------
-------------------------------------------------------------------------------------------------------------------------------
Other Directorships Held: Vice President and Director (since May 1989) of The Asia Pacific Fund, Inc.
-------------------------------------------------------------------------------------------------------------------------------
* The address of each Nominee is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ
07102.
Current Interested Trustee and Trust Officers(2):
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
Number of Portfolios
in Fund Complex
Length of Time Overseen by
Name, Age and Address Position Served(1) Trustee/Director* Other Directorships Held
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
John Birch Vice Vice President N/A None
(52) President since April
1998
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past 5 Years: Mr. Birch has served as Senior Vice President and Chief Operating Officer of
American Skandia Investment Services, Incorporated ("ASISI") since December 1997. He served as Executive Vice President and
Chief Operating Officer of International Fund Administration from August 1996 until October 1997.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
Richard G. Davy, Jr. Treasurer Treasurer
(54) since March N/A None
1995
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past 5 Years: Mr. Davy has served as Vice President of ASISI since June 1997.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
Wade A. Dokken** President President Director of American Skandia,
(42) (Chief since June, 72 Incorporated ("ASI")
Executive 2001
Officer) Trustee since
and Trustee March, 2002
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past 5 Years: Mr. Dokken has served as President and Chief Executive Officer of ASI since May
2000. He served as Executive Vice President and Chief Operating Officer of ASI from December 1999 until May 2000. Prior to
that, he served as Deputy Chief Executive Officer of ASI from December 1997 to December 1999.
------------------------------------------------------------------------------------------------------------------------------
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
Edward P. Macdonald Secretary Secretary
(35) since November N/A None
2000
------------------------------ -------------- ---------------- ---------------------- ----------------------------------------
------------------------------------------------------------------------------------------------------------------------------
Principal Occupation During Past 5 Years: Mr. Macdonald has served as Chief Counsel, Investment Management of ASI since July
2002. From September 2000 until June 2002 he served as Senior Counsel, Securities of ASI. From December 1999 until August
2000 he served as Counsel of ASI. From April 1999 until December 1999 he served as Senior Associate Counsel of ASI. Prior
to that, he was Branch Chief, Senior Counsel and Attorney at the U.S. Securities and Exchange Commission from October 1994
to April 1999.
------------------------------------------------------------------------------------------------------------------------------
* The Trustees are responsible for overseeing all 41 Portfolios included in the Trust, as well as the 31 Funds included
in American Skandia Advisor Funds, Inc. ("ASAF"), all of which are investment companies managed by the Investment Manager.
** Indicates a Trustee or Nominee who is an "interested person" within the meaning set forth in the Investment Company
Act (an "interested person"). Mr. Dokken is deemed "interested" by virtue of his serving as an officer and director of
ASI, the corporate parent and owner of the Investment Manager, as well as an officer of the Investment Manager.
(1) All of the officers and Trustees of the Trust listed above serve in similar capacities for American Skandia Advisor
Funds, Inc., which are also investment companies managed by the Investment Manager. Following completion of the
Transaction, it is expected that Messrs. O'Brien, Pileski and Schwartz will resign as Directors of ASAF but that Mr.
Carson will continue to serve in his capacity as a Director who is not an interested person.
(2) Unless otherwise indicated, each officer, Trustee and Nominee listed above has held his/her principal occupation for
at least the last five years. In addition to the principal occupations noted above, the following officers and
Interested Trustees of the Trust hold various positions with ASISI, the Trust's Investment Manager, and its affiliates,
including ASASI, ASLAC, American Skandia Fund Services, Inc. ("ASFS") ASM, American Skandia Information Services and
Technology Corporation ("ASIST") or ASI: Mr. Birch also serves as Senior Vice President and Chief Operating Officer of
ASISI and as a Senior Vice President of ASI. Mr. Dokken also serves as Chief Executive Officer of ASISI, President and
Chief Executive Officer of ASASI, ASLAC, ASFS, ASI and ASIST and as a Director of ASI. Mr. Macdonald also serves as
Chief Counsel of ASISI and ASASI. In addition, as listed above, Nominee Mr. Gunia serves as Executive Vice President,
Chief Administrative Officer and Treasurer of PI, Corporate Vice President of Prudential and President of Prudential
Investment Management Services LLC, and Nominee David R. Odenath, Jr. serves as President, Chief Executive Officer and
Chief Operating Officer of PI and Senior Vice President of Prudential.
The Board of Trustees of the Trust met sixteen times during the fiscal year ended December 31, 2002. All of
the Trustees attended at least 75% of the meetings.
The Trust currently has a Nominating and Governance Committee and an Audit Committee, as described below.
Nominating and Governance Committee. Among other duties, the Nominating and Governance Committee shall make
nominations for Independent Trustee membership on the Board of Trustees. In addition, the Committee attends to various
governance matters including committee structure and membership. The members of the Nominating and Governance Committee
include David E. A. Carson, Julian A. Lerner (Chairman), Thomas M. O'Brien, John A. Pileski and F. Don Schwartz. In
2002, the Committee met on April 10, 2002. The Committee currently does not consider nominees recommended by security
holders.
Audit Committee. The Audit Committee shall recommend to the full Board the engagement or discharge of the
Trust's independent accountants; directing investigations into matters within the scope of the independent accountants'
duties, reviewing with the independent accountants the audit plan and results of the audit, approving professional
services provided by the independent accountants prior to the performance of such services, reviewing the independence of
the independent accountants and considering the range of audit and non-audit fees. The members of the Audit Committee
include David E. A. Carson (Chairman), Julian A. Lerner, Thomas M. O'Brien, John A. Pileski and F. Don Schwartz. In
2002, the Audit Committee met on April 10, 2002, June 25, 2002, September 10, 2002 and December 3, 2002.
Auditors. Upon recommendation of the Audit Committee, the Board selected the firm of Deloitte & Touche LLP
("Deloitte") as independent auditors of the Trust for the fiscal year ending December 31, 2003. Representatives of
Deloitte are not expected to be present at the Meeting.
Audit Fees. The aggregate fees billed by Deloitte for professional services rendered for the audit of
the Trust's annual financial statements for the fiscal year ended December 31, 2002 were $248, 320.
Financial Information Systems Design and Implentation Fees. During the fiscal year ended December 31,
2002, Deloitte billed no fees for professional services relating to financial information systems design rendered to the
Trust, ASISI, or any entity controlling, controlled by or under common control with ASISI that provided services to the
Trust.
All Other Fees. During the fiscal year ended December 31, 2002, Deloitte billed no fees for other
professional services rendered to the Trust, ASISI and any entity controlling, controlled by or under common control with
ASISI that provided services to the Trust.
The Audit Committee has considered whether the services described above are compatible with Deloitte's
independence.
The dollar range of equity securities beneficially owned by the Trustees of the Trust and Nominees are listed
below as of December 31, 2002:
Independent Trustees and Nominee:
------------------------------ ------------------------------------------- ----------------------------------------------------
Aggregate Dollar Range of Equity Securities in All
Name of Trustee and Nominee Dollar Range of Equity Funds Overseen by the Trustees in the American
Securities in each Series of the Trust Skandia Complex
------------------------------ ------------------------------------------- ----------------------------------------------------
David E. A. Carson N/A $10,001 - $50,000
------------------------------ ------------------------------------------- ----------------------------------------------------
------------------------------ ------------------------------------------- ----------------------------------------------------
Julian A. Lerner N/A Over $100,000
------------------------------ ------------------------------------------- ----------------------------------------------------
------------------------------ ------------------------------------------- ----------------------------------------------------
Thomas M. O'Brien N/A Over $100,000
------------------------------ ------------------------------------------- ----------------------------------------------------
------------------------------ ------------------------------------------- ----------------------------------------------------
John A. Pileski N/A $10,001 - $50,000
------------------------------ ------------------------------------------- ----------------------------------------------------
------------------------------ ------------------------------------------- ----------------------------------------------------
F. Don Schwartz N/A Over $100,000
------------------------------ ------------------------------------------- ----------------------------------------------------
Interested Trustee:
------------------------------ ------------------------------------------- ----------------------------------------------------
Aggregate Dollar Range of Equity Securities in All
Dollar Range of Equity Funds Overseen by the Trustees in the American
Name of Trustee and Nominee Securities in each Series of the Trust Skandia Complex
------------------------------ ------------------------------------------- ----------------------------------------------------
------------------------------ ------------------------------------------- ----------------------------------------------------
Wade A. Dokken AST Strong International Equity Portfolio $1 - $10,000
($1 - $10,000)
------------------------------ ------------------------------------------- ----------------------------------------------------
The Trustees, Nominees and officers of the Trust who are affiliates of the Investment Manager do not receive
compensation directly from the Trust for serving in such capacities. However, those officers, Nominees and Trustees of
the Trust who are affiliated with the Investment Manager may receive remuneration indirectly, as the Investment Manager
will receive fees from the Trust for the services it provides. Each of the other Trustees and Nominee receives annual
and per meeting fees paid by the Trust plus expenses for each meeting of the Board and meeting of shareholders which he
attends. Compensation received during the fiscal year ended December 31, 2002 by the Trustees and Nominee who are not
affiliates of the Investment Manager was as follows:
Total Compensation from Registrant and Fund
Name of Trustee and Nominee ------------------------------------------- Complex
Aggregate Compensation from Paid to Trustee(1)
Registrant
------------------------------ -------------------------------------------- ---------------------------------------------------
--------------------------------------------
David E. A. Carson $96,175 $138,525
Julian A. Lerner $94,475 $136,125
Thomas M. O'Brien $93,075(2) $136,725(2)
John A Pileski $94,975 $137,325
F. Don Schwartz $94,475(3) $136,825(3)
(1) As of the date of this Statement, the "Fund Complex" consisted of the Trust and American Skandia Advisor Funds,
Inc. ("ASAF").
(2) Mr. O'Brien deferred payment of this compensation. The total value of Mr. O'Brien's deferred compensation, as of
December 31, 2002, was $212,315 from the Registrant and $357,484 from the Registrant and Fund Complex.
(3) Mr. Schwartz deferred a portion of the payment of this compensation. The total value of Mr. Schwartz's deferred
compensation, as of December 31, 2002, was $24,695 from the Registrant and $36,073 from the Registrant and Fund
Complex.
The Trust does not offer pension or retirement benefits to its Trustees or Nominees.
Under Proposal II, the shareholders of each Portfolio will be asked to elect eight (8) Nominees to serve as
Trustees of the Trust to hold office until their successors are elected and qualified.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL II TO ELECT ALL
NOMINEES. ANY UNMARKED PROXIES THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSAL III
APPROVAL OF CHANGES TO
FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO LENDING ACTIVITIES OF PORTFOLIOS
At any given time, while one or more of the Portfolios may wish to borrow money, other Portfolios may have excess
cash, which they generally invest in short-term (usually overnight) repurchase agreements with banks or in money market
funds. The borrowing Portfolios in general pay a higher rate of interest on their bank loans than the other Portfolios
earn on their short-term investments. In effect, the difference between the rate banks pay in interest on repurchase
agreements and what the banks charge in interest to the borrowing Portfolios represents the banks' compensation for the
arranging the loans. Accordingly, the Board of Trustees believes that a Portfolio needing cash may be able to obtain
lower rates through the Interfund Credit Facility and a Portfolio with excess cash may be able to obtain a rate of return
higher than those offered on alternative short-term investments.
If the proposed amended fundamental investment restriction is approved with respect to a Portfolio, that
Portfolio would be eligible to participate as a lender in the Interfund Credit Facility. All loans would be made
pursuant to a master loan agreement, and a lending Portfolio could lend available cash to another Portfolio only when the
"interfund loan rate" was higher than the rate the lending Portfolio could earn on a repurchase agreement. Each
borrowing Portfolio could borrow through the Interfund Credit Facility only when the interfund loan rate was lower than
the available bank loan rate. In determining to recommend the proposed amended fundamental investment restriction to
shareholders, the Trustees considered the possible risks to a Portfolio from participating in the Interfund Credit
Facility. In order to permit the Portfolios to engage in interfund borrowing and lending transactions, regulatory
approval from the Securities and Exchange Commission (the "Commission") is required because the transactions may be
considered to be between affiliated persons and therefore prohibited by the Investment Company Act. The Trust has
submitted to the Commission an exemptive application that would allow the Trust to implement the Interfund Credit
Facility allowing Portfolios to loan money to other Portfolios (the "Exemptive Application"), subject to certain
conditions. If shareholders of a Portfolio approve the Portfolio's participation as a lender in the program, all loans
would be made in accordance with the conditions contained in the expected exemptive order or in any amendment to such
order and under the oversight of the Board. If the requested exemptive order is not issued, the Interfund Credit
Facility will not be implemented until such time as an order is issued (and then in accordance with the conditions set
forth in such order) or interfund loans otherwise become permissible under the Investment Company Act. This proposal is
not contingent upon approval of the pending Exemptive Application.
Should the Commission issue an exemptive order ("Exemptive Order") in response to the Exemptive Application
allowing the Trust to implement the Interfund Credit Facility, the Portfolios' fundamental investment restrictions with
respect to lending activities would need to be amended to permit the Portfolios to loan money to other Portfolios through
operation of the Interfund Credit Facility. The Portfolios currently have fundamental investment restrictions with
respect to lending activities that reflect the Trust's securities lending program whereby Portfolios are permitted to
lend portfolio securities to certain borrowers and earn income on those loans (the "Securities Lending Program"). Under
the Securities Lending Program, a Portfolio is limited by provisions of the Investment Company Act to lending portfolio
securities in amounts up to 33 1/3% of the assets of the Portfolio. The Portfolios current fundamental investment
restrictions with respect to lending also reflect the Portfolios' ability to invest in money market securities, enter
into repurchase agreements and acquire debt securities, and the fact that these instruments may be considered loans for
purposes of the Investment Company Act.
Accordingly, in connection with the establishment of an Interfund Credit Facility and expected receipt of an
Exemptive Order from the Commission with respect thereto, the Investment Manager has recommended that each Portfolio's
fundamental investment restriction with respect to lending be amended to allow participation in the Interfund Credit
Facility.
If Proposal III is approved by a Portfolio, the current fundamental investment restriction applicable to that
Portfolio will be amended to permit the Portfolio to participate in the Interfund Credit Facility by lending money to
other Portfolios. If approved by a Portfolio, the amended fundamental investment restriction would continue to govern
loans other than loans to investment companies in the same manner as such loans are governed by the current fundamental
investment restriction. The fundamental investment restrictions which currently are applicable to each Portfolio and
which would be affected by approval of Proposal III, including the proposed changes (underlined) are as follows in
italics.
o AST American Century International Growth Portfolio, AST William Blair International Growth Portfolio, AST
Goldman Sachs Concentrated Growth Portfolio, AST Alliance Growth and Income Portfolio, AST INVESCO Capital Income
Portfolio, AST American Century Strategic Balanced Portfolio, AST Federated High Yield Portfolio, AST Strong
International Equity Portfolio, the AST MFS Global Equity Portfolio, the AST PBHG Small-Cap Growth Portfolio, the AST
DeAM Small-Cap Growth Portfolio, the AST Federated Aggressive Growth Portfolio, the AST Goldman Sachs Small-Cap Value
Portfolio, the AST DeAM Small-Cap Value Portfolio, the AST Goldman Sachs Mid-Cap Growth Portfolio, the AST Neuberger
Berman Mid-Cap Growth Portfolio, the AST Neuberger Berman Mid-Cap Value Portfolio, the AST Alger All-Cap Growth
Portfolio, the AST Gabelli All-Cap Value Portfolio, the AST Alliance Growth Portfolio, the AST MFS Growth Portfolio, the
AST Marsico Capital Growth Portfolio, the AST DeAM Large-Cap Growth Portfolio, the AST DeAM Large-Cap Value Portfolio,
the AST Alliance/Bernstein Growth + Value Portfolio, the AST Sanford Bernstein Core Value Portfolio, the AST Cohen &
Steers Realty Portfolio, the AST Sanford Bernstein Managed Index 500 Portfolio, the AST American Century Income & Growth
Portfolio, the AST MFS Growth with Income Portfolio, the AST DeAM Global Allocation Portfolio, the AST Lord Abbett
Bond-Debenture Portfolio, the AST Gabelli Small-Cap Value Portfolio, and the AST DeAM Bond Portfolio:
No Portfolio may make loans, except that a Portfolio may (i) lend portfolio securities in accordance
with the Portfolio's investment policies in amounts up to 33 1/3% of the total assets of the Portfolio
taken at market value, (ii) purchase money market securities and enter into repurchase agreements, and
(iii) acquire publicly distributed or privately placed debt securities, and (iv) make loans of money to
----------- -----------------------
other investment companies to the extent permitted by the Investment Company Act of 1940 or any
----------------------------------------------------------------------------------------------------------
exemption therefrom that may be granted by the SEC or any SEC releases, no-action letters or similar
----------------------------------------------------------------------------------------------------------
relief or interpretive guidance.
-------------------------------
o AST DeAM International Equity Portfolio:
[A Portfolio may not] . . . [m]ake loans of money or securities other than (a) through the purchase of
securities in accordance with the Portfolio's investment objective, (b) through repurchase agreements,
and (c) by lending portfolio securities in an amount not to exceed 33 1/3% of the Portfolio's total
assets, and (d) loans of money to other investment companies to the extent permitted by the Investment
------ ------------------------------------------------------------------------------------------
Company Act of 1940 or any exemption therefrom that may be granted by the SEC or any SEC releases,
----------------------------------------------------------------------------------------------------------
no-action letters or similar relief or interpretive guidance.
------------------------------------------------------------
o AST T. Rowe Price Natural Resources Portfolio, AST T. Rowe Price Asset Allocation Portfolio:
[The Portfolio may not] . . . [m]ake loans, although the Portfolio may (i) lend portfolio securities and
participate in an interfund lending program with other Price Portfolios provided that no such loan may
be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of the
Portfolio's total assets; (ii) make loans of money to other investment companies to the extent permitted
---- ---------------------------------------------------------------------------
by the Investment Company Act of 1940 or any exemption therefrom that may be granted by the SEC, or any
----------------------------------------------------------------------------------------------------------
SEC releases, no-action letters or similar relief or interpretive guidance; (iii) purchase money market
----------------------------------------------------------------------------
securities and enter into repurchase agreements; and (iv) acquire publicly-distributed or
privately-placed debt securities and purchase debt.
o AST T. Rowe Price Global Bond Portfolio:
[The Portfolio may not] . . . [m]ake loans to other persons, except (a) loans of portfolio securities,
and (b) to the extent the entry into repurchase agreements and the purchase of debt securities in
accordance with its investment objectives and investment policies may be deemed to be loans and (c)
-------
loans of money to other investment companies to the extent permitted by the Investment Company Act of
----------------------------------------------------------------------------------------------------------
1940 or any exemption therefrom that may be granted by the SEC, or any SEC releases, no-action letters
----------------------------------------------------------------------------------------------------------
or similar relief or interpretive guidance .
--------------------------------------------
o AST PIMCO Total Return Bond Portfolio, AST PIMCO Limited Maturity Bond Portfolio:
The Portfolio will not lend funds or other assets, except that the Portfolio may, consistent with its
investment objective and policies: (a) invest in debt obligations, including bonds, debentures or other
debt securities, bankers' acceptances and commercial paper, even though the purchase of such obligations
may be deemed to be the making of a loan, (b) enter into repurchase agreements, and (c) lend its
Portfolio securities in an amount not to exceed one-third the value of its total assets, provided such
loans are and in accordance with applicable guidelines established by the SEC, and the Trust's Board of
Trustees and (d) make loans of money to other investment companies to the extent permitted by the
------ ----------------------------------------------------------------------------------------
Investment Company Act of 1940 or any exemption therefrom that may be granted by the SEC, or any SEC
----------------------------------------------------------------------------------------------------------
releases, no-action letters or similar relief or interpretive guidance.
----------------------------------------------------------------------
o AST Money Market Portfolio:
The Portfolio will not make loans, except through purchasing or holding debt obligations, or entering
into repurchase agreements, or loans of Portfolio securities in accordance with the Portfolio's
investment objectives and policies, or making loans of money to other investment companies to the extent
----------- -----------------------------------------------------------
permitted by the Investment Company Act of 1940 or any exemption therefrom that may be granted by the
----------------------------------------------------------------------------------------------------------
SEC, or SEC releases, no-action letters or similar relief or interpretive guidance.
-----------------------------------------------------------------------------------
The shareholders of each Portfolio will vote separately on Proposal III. Approval of Proposal III by the
shareholders of any Portfolio is not contingent upon approval of Proposal III by the shareholders of any other
Portfolio. If Proposal III is approved by a Portfolio, the current fundamental investment restriction regarding lending
activities applicable to the Portfolio will be amended as indicated above to allow interfund lending of money by the
Portfolio.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF EACH PORTFOLIO VOTE "FOR" PROPOSAL
III. ANY UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL IV
APPROVAL OF CHANGES TO FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO BORROWING ACTIVITIES OF PORTFOLIOS
The Investment Company Act requires investment companies to impose certain limitations on borrowing activities
and a Portfolio's borrowing limitations must be fundamental. The limitations on borrowing are generally designed to
protect shareholders and their investment by restricting a Portfolios' ability to subject its assets to the claims of
creditors who, under certain circumstances, might have a claim to the Portfolio's assets that would take precedence over
the claims of shareholders.
In connection with the Interfund Credit Facility described under Proposal III, a Portfolio borrowing through the
Interfund Credit Facility would borrow money directly from another Portfolio. The Portfolios currently have fundamental
investment restrictions with respect to borrowing reflective of limitations found in Section 18(f) of the Investment
Company Act that prohibit funds from issuing any senior security except that a fund may borrow money from a bank provided
that the fund maintains asset coverage of at least 300 percent of all borrowings. The Portfolios' fundamental investment
restrictions also reflect the Portfolios' ability to engage in reverse repurchase agreements and other transactions or
investments that may be considered borrowings for purposes of the Investment Company Act.
In order to implement the Interfund Credit Facility, it is proposed that the Portfolios' current fundamental
investment restrictions with respect to borrowing be amended to explicitly allow a Portfolio to borrow money from other
Portfolios. In this regard, the Trust has sought, in its Exemptive Application, an exemption from Section 18(f) to allow
Portfolios to borrow directly from other Portfolios. In addition, as a condition of the operation of the Interfund
Credit Facility, a Portfolio that has outstanding borrowings from all sources exceeding 10 percent of its total assets
must secure each outstanding interfund loan exceeding 10 percent of assets by a pledge of segregated collateral with a
market value equal to at least 102 percent of the outstanding principal value of the loan. It is proposed that the
Portfolios' current fundamental investment restrictions with respect to borrowing also be amended, as applicable, to
conform to this condition related to the Interfund Credit Facility. If the requested Exemptive Order is not issued, the
Interfund Credit Facility will not be implemented until such time as an order is issued (and then in accordance with the
conditions set forth in such order) or interfund loans otherwise become permissible under the Investment Company Act.
This proposal is not contingent upon approval of the pending Exemptive Application.
Accordingly, in connection with the establishment of the Interfund Credit Facility, the Investment Manager has
recommended that the Portfolios' fundamental investment restrictions with respect to borrowing be amended to allow each
Portfolio to borrow money directly from another Portfolio in accordance with the conditions related to the Interfund
Credit Facility.
If Proposal IV is approved by a Portfolio, the current fundamental investment restriction applicable to that
Portfolio will be amended to permit the Portfolio to participate in the Interfund Credit Facility by borrowing money
directly from another Portfolio. The fundamental investment restrictions which currently are applicable to the
Portfolios and which would be affected by approval of Proposal IV, including the proposed changes (underlined) are as
follows in italics.
o AST Goldman Sachs Concentrated Growth Portfolio, AST Strong International Equity Portfolio, the AST MFS Global
Equity Portfolio, the AST PBHG Small-Cap Growth Portfolio, the AST DeAM Small-Cap Growth Portfolio, the AST Federated
Aggressive Growth Portfolio, the AST Goldman Sachs Small-Cap Value Portfolio, the AST DeAM Small-Cap Value Portfolio, the
AST Goldman Sachs Mid-Cap Growth Portfolio, the AST Neuberger Berman Mid-Cap Growth Portfolio, the AST Neuberger Berman
Mid-Cap Value Portfolio, the AST Alger All-Cap Growth Portfolio, the AST Gabelli All-Cap Value Portfolio, the AST
Alliance Growth Portfolio, the AST MFS Growth Portfolio, the AST Marsico Capital Growth Portfolio, the AST DeAM Large-Cap
Growth Portfolio, the AST DeAM Large-Cap Value Portfolio, the AST Alliance/Bernstein Growth + Value Portfolio, the AST
Sanford Bernstein Core Value Portfolio, the AST Cohen & Steers Realty Portfolio, the AST Sanford Bernstein Managed Index
500 Portfolio, the AST American Century Income & Growth Portfolio, the AST MFS Growth with Income Portfolio, the AST DeAM
Global Allocation Portfolio, the AST Lord Abbett Bond-Debenture Portfolio, the AST Gabelli Small-Cap Value Portfolio and
the AST DeAM Bond Portfolio:
No Portfolio may borrow money, except that a Portfolio may (i) borrow money for non-leveraging,
temporary or emergency purposes, and (ii) engage in reverse repurchase agreements and make other
investments or engage in other transactions, which may involve a borrowing, in a manner consistent with
the Portfolio's investment objective and policies; provided that the combination of (i) and (ii) shall
not exceed 33 1/3% of the value of the Portfolio's assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which
come to exceed this amount will be reduced in accordance with applicable law. Subject to the above
limitations, a Portfolio may borrow from banks or other persons to the extent permitted by applicable
law, including the Investment Company Act of 1940, or to the extent permitted by any exemption from the
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Investment Company Act of 1940 that may be granted by the SEC, or any SEC releases, no-action letters or
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similar relief or interpretive guidance.
----------------------------------------
o AST American Century International Growth Portfolio, AST American Century Strategic Balanced Portfolio:
[A Portfolio may not] . . . [b]orrow any money, except in an amount not in excess of 33 1/3% of the
total assets of the Portfolio, and then only for temporary, emergency and extraordinary purposes; this
---------
does not prohibit the escrow and collateral arrangements in connection with investment in interest rate
futures contracts and related options by the Portfolio. Subject to the above limitations, a Portfolio
---------------------------------------------------
may borrow from persons to the extent permitted by applicable law, including the Investment Company Act
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of 1940, or to the extent permitted by any exemption from the Investment Company Act of 1940 that may be
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granted by the SEC, or any SEC releases, no-action letters or similar relief or interpretive guidance.
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o AST T. Rowe Price Natural Resources Portfolio, AST T. Rowe Price Asset Allocation Portfolio:
[The Portfolio may not] . . .[b]orrow money except that the Portfolio may (i) borrow for non-leveraging,
temporary or emergency purposes and (ii) engage in reverse repurchase agreements and make other
investments or engage in other transactions, which may involve a borrowing, in a manner consistent with
the Portfolio's investment objective and program, provided that the combination of (i) and (ii) shall
not exceed 33 1/3% of the value of the Portfolio's total assets (including the amount borrowed) less
liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which
come to exceed this amount will be reduced in accordance with applicable law. The Portfolio may borrow
from banks, other Price Portfolios or other persons to the extent permitted by applicable law, including
------------
the Investment Company Act of 1940, or to the extent permitted by any exemption from the Investment
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Company Act of 1940 that may be granted by the SEC, or any SEC releases, no-action letters or similar
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relief or interpretive guidance.
--------------------------------
o AST DeAM International Equity Portfolio:
[The Portfolio may not] . . [b]orrow money except from banks persons to the extent permitted by
--------------------------------------
applicable law, including the Investment Company Act of 1940, or to the extent permitted by any
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exemption from the Investment Company Act of 1940 that may be granted by the SEC, or any SEC releases,
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no-action letters or similar relief or interpretive guidance, and then in amounts up to 33 1/3% of the
--------------------------------------------------------------------------
Portfolio's total assets.
o AST William Blair International Growth Portfolio:
The Portfolio may borrow money for temporary or emergency purposes (not for leveraging or investment) in
an amount not exceeding 33 1/3% of the value of its total assets (including the amount borrowed) less
liabilities (other than borrowings). If borrowings exceed 33 1/3% of the value of the Portfolio's total
assets by reason of a decline in net assets, the Portfolio will reduce its borrowings within three
business days to the extent necessary to comply with the 33 1/3% limitation. This policy shall not
prohibit reverse repurchase agreements, deposits of assets to margin or guarantee positions in futures,
options, swaps or forward contracts, or the segregation of assets in connection with such contracts.
---
Subject to the above limitations, a Portfolio may borrow from persons to the extent permitted by
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applicable law, including the Investment Company Act of 1940, or to the extent permitted by any
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exemption from the Investment Company Act of 1940 that may be granted by the SEC, or any SEC releases,
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no-action letters or similar relief or interpretive guidance.
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o AST Alliance Growth and Income Portfolio:
The Portfolio will not borrow money except from banks persons to the extent permitted by applicable law,
----------------------------------------------------
including the Investment Company Act of 1940, or to the extent permitted by any exemption from the
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Investment Company Act of 1940 that may be granted by the SEC or any SEC releases, no-action letters or
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similar relief or interpretive guidance, and then in amounts not in excess of 33 1/3% of its total
--------------------------------------------
assets. The Portfolio may borrow at prevailing interest rates and invest the Portfolios in additional
securities. The Portfolio's borrowings are limited so that immediately after such borrowing the value
of the Portfolio's assets (including borrowings) less its liabilities (not including borrowings) is at
least three times the amount of the borrowings. Should the Portfolio, for any reason, have borrowings
that do not meet the above test then, within three business days, the Portfolio must reduce such
borrowings so as to meet the necessary test. Under such a circumstance, the Portfolio may have to
liquidate securities at a time when it is disadvantageous to do so.
o AST INVESCO Capital Income Portfolio:
[The Portfolio may not] . . .[b]orrow money except from banks persons to the extent permitted by
-------------------------------------
applicable law, including the Investment Company Act of 1940, or to the extent permitted by any
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exemption from the Investment Company Act of 1940 that may be granted by the SEC or any SEC releases,
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no-action letters or similar relief or interpretive guidance, in excess of 533 1/3% of the value of its
--------------------------------------------------------------
total net assets, and when borrowing, it is a temporary measure for temporary or emergency purposes.
---------------
o AST T. Rowe Price Global Bond Portfolio:
[The Portfolio may not] . . . [b]orrow money, except as a temporary measure for temporary, extraordinary
--- ---------
or emergency purposes or except in connection with reverse repurchase agreements provided that the
Portfolio maintains asset coverage of 300% for all borrowings. Subject to the above limitations, a
--------------------------------------
Portfolio may borrow from persons to the extent permitted by applicable law, including the Investment
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Company Act of 1940, or to the extent permitted by any exemption from the Investment Company Act of 1940
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that may be granted by the SEC, or any SEC releases, no-action letters or similar relief or interpretive
----------------------------------------------------------------------------------------------------------
guidance.
---------
o AST Federated High Yield Portfolio:
The Portfolio will not borrow money except as a temporary measure for temporary, extraordinary or
--------------
emergency purposes and then only from banks persons to the extent permitted by applicable law, including
-------------------------------------------------------------
the Investment Company Act of 1940, or to the extent permitted by any exemption from the Investment
----------------------------------------------------------------------------------------------------------
Company Act of 1940 that may be granted by the SEC or any SEC releases, no-action letters or similar
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relief or interpretive guidance, and only in amounts not in excess of 533 1/3% of the value of its net
--------------------------------- -- ---
assets, taken at the lower of cost or market. In addition, to meet redemption requests without
immediately selling portfolio securities, the Portfolio may borrow up to one-third of the value of its
total assets (including the amount borrowed) less its liabilities (not including borrowings, but
including the current fair market value of any securities carried in open short positions). This
practice is not for investment leverage but solely to facilitate management of the portfolio by enabling
the Portfolio to meet redemption requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous. If, due to market fluctuations or other reasons, the value of the
Portfolio's assets falls below 300% of its borrowings, it will reduce its borrowings within three
business days. No more than 10% of the value of the Portfolio's total assets at the time of providing
such security may be used to secure borrowings .
o AST PIMCO Total Return Bond Portfolio, AST PIMCO Limited Maturity Bond Portfolio:
The Portfolio will not borrow money, issue senior securities, pledge, mortgage, hypothecate its assets,
except that the Portfolio may (i) borrow from banks persons to the extent permitted by applicable law,
-----------------------------------------------------
including the Investment Company Act of 1940, or to the extent permitted by any exemption from the
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Investment Company Act of 1940 that may be granted by the SEC or any SEC releases, no-action letters or
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similar relief or interpretive guidance, or enter into reverse repurchase agreements, or employ similar
----------------------------------------
investment techniques, and pledge its assets in connection therewith, but only if immediately after each
borrowing there is an asset coverage of 300% and (ii) enter into transactions in options, futures and
options on futures and other derivative instruments as described in the Trust's Prospectus and this
Statement (the deposit of assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed delivery basis, collateral
arrangements with respect to initial or variation margin deposits for future contracts and commitments
entered into under swap agreements or other derivative instruments, will not be deemed to be pledges of
the Portfolio's assets).
o AST Money Market Portfolio:
The Portfolio will not borrow money, except from banks persons to the extent permitted by applicable
-----------------------------------------------
law, including the Investment Company Act of 1940, or to the extent permitted by any exemption from the
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Investment Company Act of 1940 that may be granted by the SEC or any SEC releases, no-action letters or
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similar relief or interpretive guidance, for temporary, extraordinary or emergency purposes and then
---------------------------------------------------------
only in amounts not to exceed 1033 1/3% of the value of the Portfolio's total assets, taken at cost, at
------
the time of such borrowing. The Portfolio may not mortgage, pledge or hypothecate any assets except in
connection with any such borrowing and in amounts not to exceed 10% of the value of the Portfolio's net
assets at the time of such borrowing. The Portfolio will not purchase securities while borrowings
exceed 5% of the Portfolio's total assets. This borrowing provision is included to facilitate the
orderly sale of securities, for example, in the event of abnormally heavy redemption requests, and is
not for investment purposes and shall not apply to reverse repurchase agreements.
The shareholders of each Portfolio will vote separately on Proposal IV. Approval of Proposal IV by the
shareholders of any Portfolio is not contingent upon approval of Proposal IV by the shareholders of any other Portfolio.
If Proposal IV is approved by a Portfolio, the current fundamental investment restriction regarding borrowing activities
applicable to each such Portfolio will be amended as indicated above to allow the Portfolio to borrow money directly from
another Portfolio.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF EACH OF THE PORTFOLIOS VOTE "FOR"
PROPOSAL IV. ANY UNMARKED PROXIES WILL BE SO VOTED.
PROPOSAL V
APPROVAL OF CHANGES TO FUNDAMENTAL
INVESTMENT RESTRICTIONS
WITH RESPECT TO INVESTMENT IN A SINGLE ISSUER
In addition to approval of the operation of the Interfund Credit Facility, the Exemptive Application also seeks
permission to implement the Cash Sweep and Securities Lending Cash Collateral Management Program. Under the Cash Sweep
and Securities Lending Cash Collateral Management Program, the Portfolios would invest on a daily basis their uninvested
cash and cash collateral in affiliated unregistered and registered money market funds (the "Money Market Funds"). A
Portfolio's uninvested cash may result from a variety of sources including dividends or interest received on portfolio
securities, unsettled securities transactions, reserves held for investment strategy purposes, scheduled maturity of
investments, liquidation of investment securities to meet anticipated redemptions, dividend payments, or new monies
received from investors. The Trust estimates that at any given time it is possible that as much as 25% of a Portfolio's
total assets could consist of uninvested cash. In addition, a Portfolio's cash collateral is received when a Portfolio
participates in the Trust's Securities Lending Program whereby a Portfolio lends certain of its portfolio securities to
borrowers, who deposit cash with the Portfolio's custodian as security for the loans. The Money Market Funds will be
cash management vehicles that seek to provide current income consistent with the preservation of capital and liquidity.
Pursuant to the Cash Sweep and Securities Lending Cash Collateral Management Program, a Portfolio may earn higher returns
on its uninvested cash and cash collateral than could be attained by investing directly in money market securities or
other types of investments, would further diversify its holdings by holding shares of the Money Market Funds, and
eliminate transaction costs currently incurred in connection with its short-term investment of cash. The Trust requires
an exemptive order, which may be included in the Exemptive Order, from the Commission to exempt the operation of the Cash
Sweep and Securities Lending Cash Collateral Management Program from certain provisions of the Investment Company Act
that limit the percentage of an investment company that another investment company may acquire, and provisions of the
Investment Company Act that restrict or prohibit certain affiliated or joint transactions among funds. However, this
proposal is not contingent upon approval of the pending Exemptive Application or issuance of the Exemptive Order.
The Proposal V Voting Portfolios currently have fundamental investment restrictions that restrict a Portfolio's
investment in a single issuer to 5 percent of the Portfolio's assets and/or 10 percent of the issuer's securities.
Pursuant to the Cash Sweep and Securities Lending Cash Collateral Management Program, a Portfolio would be able to invest
up to 25 percent of its total assets in a Money Market Fund. Amending the Portfolios' current fundamental investment
restriction would enable the Portfolios to take advantage of the investment opportunities that would be presented by the
Cash Sweep and Securities Lending Cash Collateral Management Program Accordingly, it is proposed that each Proposal V
Voting Portfolio's fundamental investment restriction with respect to investment in a single issuer be amended to allow
investment in the Money Market Funds up to the limit provided under the Cash Sweep and Securities Lending Cash Collateral
Management Program.
Provisions of the Investment Company Act with respect to fund diversification limit a diversified fund's
investment in a single issuer, but only with respect to 75 percent of the fund's total assets, to 5 percent of the fund's
total assets and 10 percent of the issuer's securities. By amending each applicable Proposal V Voting Portfolio's
fundamental investment restriction to meet the Investment Company Act limits regarding diversification, a Proposal V
Voting Portfolio would be able to meet the diversification requirements under the Investment Company Act and to
participate in the Cash Sweep and Securities Lending Cash Collateral Management Program up to the limits allowed in the
Program. Accordingly, it is proposed that each Proposal V Voting Portfolio's fundamental investment restrictions with
respect to investment in a single issuer be so amended.
The fundamental investment restrictions which currently are applicable to the Proposal V Voting Portfolios and
which would be affected by approval of Proposal V, including the proposed changes (underlined) are as follows in italics.
o AST Alliance Growth and Income Portfolio:
As to 75% of the value of its total assets, Tthe Portfolio will not purchase a security of any issuer
----------------------------------------------- --------------
(other than securities issued or guaranteed by the U.S. Government or any of its agencies or
----------------------------------------------------------------------------------------------------------
instrumentalities, or securities of other investment companies) if as a result, the Portfolio would own
----------------------------------------------------------------
more than 10% of the outstanding voting securities of any issuer (a) more than 5% of the Portfolio's
-------------------------------------
total assets would be invested in the securities of that issuer, or (b) the Portfolio would hold more
----------------------------------------------------------------------------------------------------------
than 10% of the outstanding voting securities of that issuer.
-------------------------------------------------------------
o AST INVESCO Capital Income Portfolio:
[The Portfolio may not] . . . [a]s to 75% of the value of its total assets, Ppurchase a security of any
-------------------------------------------- ---------- -------
issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or
----------------------------------------------------------------------------------------------------------
instrumentalities, or securities of other investment companies) if as a result, (a) more than 5% of the
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Portfolio's total assets would be invested in the securities of that issuer, or (b) the Portfolio would
----------------------------------------------------------------------------------------------------------
hold more than 10% of the outstanding voting securities of that issuer. securities if the purchase would
----------------------------------------------------------------------------------------------------------
cause the Portfolio, at the time, to have more than 5% of its total assets invested in the securities of
----------------------------------------------------------------------------------------------------------
any one company or to own more than 10% of the voting securities of any one company (except obligations
----------------------------------------------------------------------------------------------------------
issued or guaranteed by the US Government).
--------------------------------------------
o AST Goldman Sachs Concentrated Growth Portfolio:
The Portfolio will not purchase a security if as a result, the Portfolio would own more than 10% of the
outstanding voting securities of any issuer.
The shareholders of each Proposal V Voting Portfolio will vote separately on Proposal V. Approval of Proposal V
by the shareholders of any Proposal V Voting Portfolio is not contingent upon approval of Proposal V by the shareholders
of the other Proposal V Voting Portfolios. If Proposal V is approved by a Proposal V Voting Portfolio, the current
fundamental investment restriction with respect to investment in a single issuer applicable to a Portfolio will be
amended as indicated above.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF THE PROPOSAL V VOTING PORTFOLIOS
VOTE "FOR" PROPOSAL V. ANY UNMARKED PROXIES THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSAL VI
APPROVAL OF CHANGES TO FUNDAMENTAL
INVESTMENT RESTRICTIONS
WITH RESPECT TO DIVERSIFICATION CLASSIFICATION
The Investment Company Act requires all mutual funds to specify whether they are "diversified" or
"non-diversified". The AST Goldman Sachs Concentrated Growth Portfolio (the "Concentrated Growth Portfolio") has
historically elected to be classified as a "diversified" fund under the Investment Company Act. As a diversified fund,
at least 75% of the value of the Concentrated Growth Portfolio's assets must be represented by cash and cash items, U.S.
Government securities, securities of other investment companies, and other securities limited with respect to any one
issuer to an amount not greater than 5% of the value of the Portfolio's total assets and not more than 10% of the
outstanding voting securities of such issuer (the "Diversification Requirement"). In effect, a diversified fund is
limited, with respect to 75% of its total assets, to investment in a single issuer of 5% of the Portfolio's assets and
10% of the issuer's outstanding voting stock. A fund may not change its classification as a diversified fund without
shareholder approval. In addition, the AST Goldman Sachs Concentrated Growth Portfolio has adopted its diversified
policy as a fundamental investment restriction of the Portfolio. As a fundamental investment restriction, the
Portfolio's policy may not be changed without shareholder approval.
Goldman Sachs Asset Management ("Goldman") replaced Janus Capital Management LLC as sub-advisor to the AST
Goldman Sachs Concentrated Growth Portfolio on November 11, 2002. As the current sub-advisor, Goldman's investment
strategy with respect to the AST Goldman Sachs Concentrated Growth Portfolio will be to focus portfolio investments on a
smaller number of stocks compared to the previous investment strategy. Thus, Goldman wants the flexibility to invest in
a single issuer to a greater extent than permitted under the Diversification Requirement. Accordingly, shareholders of
the Concentrated Growth Portfolio are being asked to change the Concentrated Growth Portfolio's classification from a
diversified fund to a non-diversified fund, and the Concentrated Growth Portfolio's fundamental investment restriction to
reflect the same, in order to accommodate the proposed investment strategy for the Portfolio. This flexibility would be
available to any successor sub-advisors to the Portfolio.
The AST Goldman Sachs Mid-Cap Growth Portfolio has historically elected to be classified as a "non-diversified"
fund under the Investment Company Act. Under the Investment Company Act, a non-diversified fund is defined as any fund
that is not a diversified fund. The Internal Revenue Code of 1986, as amended ("IRC"), though, specifies certain
diversification requirements for a mutual fund in order to be treated as a regulated investment company for tax purposes
regardless of whether a fund is diversified or non-diversified under the Investment Company Act. In effect, these IRC
requirements limit a fund, with respect to 50% of its total assets, to investment in a single issuer of 5% of the fund's
assets and 10% of the issuer's outstanding voting stock. The AST Goldman Sachs Mid-Cap Growth Portfolio has adopted its
classification as non-diversified as a fundamental investment restriction of the Portfolio. As a fundamental investment
restriction, the Portfolio's classification as non-diversified may not be changed without shareholder approval.
Goldman's investment strategy with respect to the AST Goldman Sachs Mid-Cap Growth Portfolio will be to manage
the Portfolio as a diversified fund rather than a non-diversified fund. Accordingly, shareholders of the Portfolio are
being asked to change the Portfolio's fundamental investment restriction to reflect a change in the Portfolio's
classification from a non-diversified fund to a diversified fund in order to accommodate Goldman's investment strategy
for the Portfolio.
If Proposal VI is approved by a Proposal VI Voting Portfolio, the current fundamental investment restriction with
respect to fund diversification applicable to that Portfolio will be amended as discussed above. The fundamental
investment restrictions which currently are applicable to the Proposal VI Voting Portfolios and which would be affected
by approval of Proposal VI, including the proposed changes (underlined) are as follows in italics.
o AST Goldman Sachs Concentrated Growth Portfolio:
As to75% 50% of the value of its total assets, the Portfolio will not purchase a security of any issuer
------------------- --------------
(other than securities issued or guaranteed by the U.S. Government or any of its agencies or
----------------------------------------------------------------------------------------------------------
instrumentalities, or securities of other investment companies) if as a result, (a) more than 5% of the
-------------------------------------------------------------------------------------------------
Portfolio's total assets would be invested in the securities of that issuer, and (b) the Portfolio would
- -------------------------------
hold more than 10% of the outstanding voting securities of that issuer.
-----------------------------------------------------------------------
o AST Goldman Sachs Mid-Cap Growth Portfolio:
As to50% 75% of the value of its total assets, the Portfolio will not purchase a security of any issuer
(other than securities issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or securities of other investment companies) if as a result, (a) more than 5% of the
--------------------------------------------
Portfolio's total assets would be invested in the securities of that issuer, and (b) the Portfolio would
-------------------------------
hold more than 10% of the outstanding voting securities of that issuer.
----------------------------------------------------------------------
The shareholders of each Proposal VI Voting Portfolio will vote separately on Proposal VI. Approval of Proposal
VI by the shareholders of any Proposal VI Voting Portfolio is not contingent upon approval of Proposal VI by the
shareholders of the other Proposal VI Voting Portfolio. If Proposal VI is approved by a Proposal VI Voting Portfolio,
the current fundamental investment restriction with respect to diversification applicable to that Portfolio will be
amended as indicated above.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF THE PROPOSAL VI VOTING PORTFOLIOS
VOTE "FOR" PROPOSAL VI. ANY UNMARKED PROXIES THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
PROPOSAL VII
APPROVAL OF RECLASSIFICATION OF CERTAIN FUNDAMENTAL INVESTMENT RESTRICTIONS FROM "FUNDAMENTAL" TO "NON-FUNDAMENTAL"
The shareholders of each of the Proposal VII Voting Portfolios are being asked to approve the reclassification of
certain fundamental investment restrictions from "fundamental" to "non-fundamental". Fundamental investment restrictions
may not be changed without shareholder approval while non-fundamental investment restrictions may be changed (or
eliminated) by the Trustees without shareholder approval. In certain cases, the current fundamental restrictions
proposed for reclassification reflect regulatory, business or industry conditions, practices or requirements that are no
longer in effect. In some cases, the fundamental restrictions reflect requirements of the Investment Company Act that
would continue to apply to the subject Portfolios even though the current fundamental restrictions are eliminated. In
other cases, the current fundamental restrictions proposed for reclassification reflect limitations adopted by a
Portfolio's sub-advisor with respect to other funds similarly managed by the sub-advisor. In each case, however, the
Investment Company Act does not require a fundamental investment restriction.
Reclassification of these fundamental investment restrictions would reduce administrative burdens associated with
the restriction and provide additional flexibility to pursue investment policies consistent with current law without the
significant delay and expense to the Portfolios of seeking for shareholder approval. The reclassification of the subject
fundamental investment restrictions is not anticipated to affect the manner in which any Proposal VII Portfolio currently
is managed. The Trust will continue to be afforded protections under the Investment Company Act notwithstanding the
reclassification of the subject fundamental investment restrictions.
If Proposal VII is approved by a Proposal VII Voting Portfolio, the current fundamental investment restrictions
applicable to that Portfolio that are permitted to be made non-fundamental under the Investment Company Act will be
reclassified as a non-fundamental investment restriction as follows.
o Investment Restrictions Applicable Only to the AST Alliance Growth and Income Portfolio, the AST INVESCO Equity
Income Portfolio, the AST Federated High Yield Portfolio, the AST PIMCO Total Return Bond Portfolio, the AST PIMCO
Limited Maturity Bond Portfolio and the AST Money Market Portfolio:
A Portfolio will not buy any securities or other property on margin (except for such short-term credits as are
necessary for the clearance of transactions).
A Portfolio will not invest in companies for the purpose of exercising control or management.
o Investment Restrictions Applicable Only to the AST Alliance Growth and Income Portfolio:
The Portfolio will not pledge, mortgage, or hypothecate its assets -- however, this provision does not apply to
the grant of escrow receipts or the entry into other similar escrow arrangements arising out of the writing of covered
call options.
The Portfolio will not purchase securities of any issuer unless it or its predecessor has a record of three
years' continuous operation, except that the Portfolio may purchase securities of such issuers through subscription
offers or other rights it receives as a security holder of companies offering such subscriptions or rights, and such
purchases will then be limited in the aggregate to 5% of the Portfolio's net assets at the time of investment.
The Portfolio will not make short sales except short sales made "against the box" to defer recognition of taxable
gains or losses.
The Portfolio will not purchase a security if as a result, more than 5% of the value of that Portfolio's assets,
at market value, would be invested in the securities of issuers which, with their predecessors, have been in business
less than three years.
o Investment Restrictions Applicable Only to the AST INVESCO Equity Income Portfolio:
The Portfolio may not issue preference shares or create any funded debt.
The Portfolio may not sell short.
The Portfolio may not purchase any security or enter into a repurchase agreement, if as a result, more than 15%
of its net assets would be invested in repurchase agreements not entitling the holder to payment of principal and
interest within seven days and in securities that are illiquid by virtue of legal or contractual restrictions on resale
or the absence of a readily available market. The Trustees or the Investment Manager or the Sub-advisor, acting pursuant
to authority delegated by the Trustees, may determine that a readily available market exists for securities eligible for
resale pursuant to Rule 144A under the Securities Act of 1933, or any successor to that rule, and therefore that such
securities are not subject to the foregoing limitation.
o Investment Restrictions Applicable Only to the AST Federated High Yield Portfolio:
The Portfolio will not purchase any securities on margin but may obtain such short-term credits as may be
necessary for the clearance of transactions.
The Portfolio will not invest more than 5% of the value of its total assets in securities of companies, including
their predecessors, that have been in operation for less than three years.
The Portfolio will not invest more than 5% of the value of its total assets in foreign securities which are not
publicly traded in the United States.
The Portfolio will not write, purchase, or sell puts, calls, or any combination thereof.
The Portfolio will not make short sales of securities or maintain short positions, unless: during the time the
short position is open, it owns an equal amount of the securities sold or securities readily and freely convertible into
or exchangeable, without payment of additional consideration, for securities of the same issue as, and equal in amount
to, the securities sold short; and not more than 10% of the Portfolio's net assets (taken at current value) is held as
collateral for such sales at any one time.
The Portfolio will not purchase securities of a company for the purpose of exercising control or management.
However, the Portfolio may invest in up to 10% of the voting securities of any one issuer and may exercise its voting
powers consistent with the best interests of the Portfolio. From time to time, the Portfolio, together with other
investment companies advised by subsidiaries or affiliates of Federated Investors, may together buy and hold substantial
amounts of a company's voting stock. All such stock may be voted together. In some such cases, the Portfolio and the
other investment companies might collectively be considered to be in control of the company in which they have invested.
In some cases, Trustee, agents, employees, officers, or others affiliated with or acting for the Portfolio, its
Sub-advisor, or affiliated companies might possibly become directors of companies in which the Portfolio holds stock.
o Investment Restrictions Applicable Only to the AST PIMCO Total Return Bond Portfolio:
The Portfolio will not maintain a short position, or purchase, write or sell puts, calls, straddles, spreads or
combinations thereof, except as set forth in the Trust's Prospectus and this Statement for transactions in options,
futures, and options on futures transactions arising under swap agreements or other derivative instruments.
o Investment Restrictions Applicable Only to the AST PIMCO Limited Maturity Bond Portfolio:
The Portfolio may not maintain a short position, or purchase, write or sell puts, calls, straddles, spreads or
combinations thereof, except on such conditions as may be set forth in the Prospectus and in this Statement.
o Investment Restrictions Applicable Only to the AST Money Market Portfolio:
The Portfolio will not acquire any illiquid securities, such as repurchase agreements with more than seven days
to maturity or fixed time deposits with a duration of over seven calendar days, if as a result thereof, more than 10% of
the market value of the Portfolio's total assets would be in investments which are illiquid.
The Portfolio will not purchase securities on margin, make short sales of securities, or maintain a short
position, provided that this restriction shall not be deemed to be applicable to the purchase or sale of when-issued
securities or of securities for delivery at a future date.
The shareholders of each Proposal VII Voting Portfolio will vote separately on Proposal VII. Approval of
Proposal VII by the shareholders of any Proposal VII Voting Portfolio is not contingent upon approval of Proposal VII by
the shareholders of the other Proposal VII Voting Portfolios. If Proposal VII is approved by a Proposal VII Voting
Portfolio, the current fundamental investment restriction applicable to that Portfolio will be reclassified as a
non-fundamental investment restriction.
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND THAT THE SHAREHOLDERS OF THE PROPOSAL VII VOTING PORTFOLIOS
VOTE "FOR" PROPOSAL VII. ANY UNMARKED PROXIES THAT ARE RETURNED ON A TIMELY BASIS WILL BE SO VOTED.
Other Matters and Shareholder Proposals
The Board of Trustees intends to bring before the Meeting the matters set forth in the foregoing Notice. The
Trustees do not expect any other business to be brought before the Meeting. If, however, any other matters are properly
presented to the Meeting for action, it is intended that the persons named in the enclosed proxy will vote in accordance
with their judgment. A shareholder executing and returning a proxy may revoke it at any time prior to its exercise by
written notice of such revocation to the Secretary of the Trust, by execution of a subsequent proxy, or by voting in
person at the Meeting.
The presence in person or by proxy of the holders of one-third of the outstanding shares of the Trust is required
to constitute a quorum at the Meeting. Because ASLAC is the legal owner of nearly 100% of each Portfolio's shares,
ASLAC's presence at the Meeting will constitute a quorum under the Trust's By-laws. Shares beneficially held by
shareholders present in person or represented by proxy at the Meeting will be counted for the purpose of calculating the
votes cast on the issues before the Meeting. Approval of Proposals I, III, IV, V, VI and VII requires the vote of a
"majority of the outstanding voting securities," of the Portfolio, as defined in the Investment Company Act, which means
the vote of 67% or more of the shares of the Portfolio present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Portfolio are present or represented by proxy, or the vote of more than 50% of the outstanding
shares of the Portfolio, whichever is less. With respect to Proposal II, a plurality of votes cast at the Meeting, in
person or by proxy, will elect a Trustee. There is no cumulative voting in the election of Trustees. An abstention by a
shareholder on any of these Proposals, either by proxy or by vote in person at a Meeting, has the same effect as a
negative vote.
Shareholders beneficially owning more than one Portfolio generally will receive a single proxy statement and
proxy card. It is important to mark, sign, date and return all proxy cards received.
---
In the event that sufficient votes to approve any proposal are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares represented at the Meeting in person or by proxy. The persons
named as proxies will vote those proxies that they are entitled to vote FOR or AGAINST any such adjournment proposal in
their discretion.
The Trust is not required to hold and will not ordinarily hold annual shareholders' meetings. The Board of
Trustees may call special meetings of the shareholders for action by shareholder vote as required by the Investment
Company Act or the Trust's Declaration of Trust.
Pursuant to rules adopted by the Commission, a shareholder may include in proxy statements relating to annual and
other meetings of the shareholders of the Trust certain proposals for shareholder action which he or she intends to
introduce at such meetings; provided, among other things, that such proposal must be received by the Trust at least
thirty days before a solicitation of proxies is made for such meeting. Timely submission of a proposal does not
necessarily mean that the proposal will be included.
By order of the Board of Trustees
/s/ Edward P. Macdonald
Edward P. Macdonald
Secretary
American Skandia Trust
EXHIBIT B
------------------------------------------------------ ------------------ ----------------- ---------------
AST Funds Date of Current Investment Amount of Fee
Investment Management Fee Paid to ASISI
Management last Fiscal
Agreement Year
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Strong Internat'l Equity Portfolio 12/10/2001 0.87% 3,326,254
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST William Blair International Growth Portfolio 11/11/2002 1.00% 4,293,094
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST American Century Internat'l Growth Portfolio 5/1/2000 1.00% 4,623,343
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM International Equity Portfolio 5/1/2002 1.00% 1,329,260
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST MFS Global Equity Portfolio 10/18/1999 1.00% 628,385
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST PBHG Small-Cap Growth Portfolio 9/15/2001 0.90% 3,139,282
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Small-Cap Growth Portfolio 12/10/2001 0.95% 3,307,221
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Federated Aggressive Growth Portfolio 10/23/2000 0.95% 255,482
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Goldman Sachs Small-Cap Value Portfolio 5/1/2001 0.95% 4,488,013
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Gabelli Small-Cap Value Portfolio 10/23/2000 0.90% 4,711,797
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Small-Cap Value Portfolio 5/1/2002 0.95% 39,575
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Goldman Sachs Mid-Cap Growth Portfolio 11/11/2002 1.00% 591,557
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Neuberger Berman Mid-Cap Growth Portfolio 5/1/1998 0.90% 3,457,835
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Neuberger Berman Mid-Cap Value Portfolio 5/1/1998 0.90% 8,428,514
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Alger All-Cap Growth Portfolio 12/31/1999 0.95% 4,831,748
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Gabelli All-Cap Value Portfolio 10/23/2000 0.95% 1,317,380
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST T. Rowe Price Natural Resources Portfolio 5/1/1995 0.90% 1,334,499
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Alliance Growth Portfolio 5/1/2000 0.90% 3,051,290
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST MFS Growth Portfolio 10/18/1999 0.90% 6,513,842
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Marsico Capital Growth Portfolio 12/22/1997 0.90% 10,727,759
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Goldman Sachs Concentrated Growth Portfolio 11/11/2002 0.90% 14,657,442
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Large-Cap Growth Portfolio 5/1/2002 0.85% 377,582
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Large-Cap Value Portfolio 5/1/2002 0.85% 766,469
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Alliance/Bernstein Growth + Value Portfolio 5/1/2001 0.90% 312,093
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Sanford Bernstein Core Value Portfolio 5/1/2001 0.75% 617,386
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Cohen & Steers Realty Portfolio 1/2/1998 1.00% 1,871,717
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Sanford Bernstein Managed Index 500 Portfolio 5/1/2000 0.60% 3,161,195
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST American Century Income & Growth Portfolio 5/4/1999 0.75% 2,344,395
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Alliance Growth and Income Portfolio 5/1/2000 0.75% 11,270,925
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST MFS Growth with Income Portfolio 10/18/1999 0.90% 868,818
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST INVESCO Equity Income Portfolio 1/3/1994 0.75% 6,322,700
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Global Allocation Portfolio 5/1/2002 0.10% 1,329,911
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST American Century Strategic Balanced Portfolio 12/30/1996 0.85% 1,649,127
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST T. Rowe Price Asset Allocation Portfolio 1/3/1994 0.85% 2,533,863
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST T. Rowe Price Global Bond Portfolio 5/1/1996 0.80% 1,179,262
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Federated High Yield Portfolio 1/3/1994 0.75% 4,012,796
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Lord Abbett Bond-Debenture Portfolio 10/23/2000 0.80% 760,144
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST DeAM Bond Portfolio 5/1/2002 0.85% 603,169
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST PIMCO Total Return Bond Portfolio 1/3/1994 0.65% 12,286,582
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST PIMCO Limited Maturity Bond Portfolio 5/1/1995 0.65% 5,426,765
------------------------------------------------------ ------------------ ----------------- ---------------
------------------------------------------------------ ------------------ ----------------- ---------------
AST Money Market Portfolio 9/15/2001 0.50% 12,719,198
------------------------------------------------------ ------------------ ----------------- ---------------
EXHIBIT C
------------------------------------------------------ -------------------------- --------------------
Comparable ASAF Funds Total Net Assets on Investment
December 31, 2002 (in Management Fee
millions)
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Strong International Equity Fund 42 1.10%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF William Blair International Growth Fund 137 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF American Century International Growth Fund 54 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF DeAM International Equity Fund 51 1.10%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF PBHG Small-Cap Growth Fund 98 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF DeAM Small-Cap Growth Fund 38 0.95%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Gabelli Small-Cap Value Fund 175 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Goldman Sachs Mid-Cap Growth Fund 19 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Neuberger Berman Mid-Cap Growth Fund 142 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Neuberger Berman Mid-Cap Value Fund 189 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Alger All-Cap Growth Fund 24 0.95%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Gabelli All-Cap Value Fund 67 0.95%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Alliance Growth Fund 78 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Marsico Capital Growth Fund 565 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Goldman Sachs Concentrated Growth Fund 525 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF DeAm Large-Cap Growth Fund 2 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF DeAM Large-Cap Value Fund 1 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Alliance/Bernstein Growth + Value Fund 11 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Sanford Bernstein Core Value Fund 27 0.85%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Sanford Bernstein Managed Index 500 Fund 124 0.80%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Alliance Growth and Income Fund 227 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF MFS Growth with Income Fund 37 1.00%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF INVESCO Equity Income Fund 200 0.75%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF American Century Strategic Balanced Fund 136 0.90%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Federated High Yield Fund 160 0.70%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF PIMCO Total Return Bond Fund 555 0.65%
------------------------------------------------------ -------------------------- --------------------
------------------------------------------------------ -------------------------- --------------------
ASAF Money Market Fund 389 0.50%
------------------------------------------------------ -------------------------- --------------------
EXHIBIT D
-------------------------------------------------------------------------------------------------------
Comparable Prudential Portfolios Total Net Assets on Investment Management
December 31, 2002 Fee
(in Millions)
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Money Market 1,371,843,010 0.40%
-------------------------------------------------------------------------------------------------------
Diversified Bond 1,370,698,067 0.40%
-------------------------------------------------------------------------------------------------------
Equity 3,275,281,110 0.45%
-------------------------------------------------------------------------------------------------------
Flexible Managed 3,181,622,066 0.60%
-------------------------------------------------------------------------------------------------------
Conservative Balanced 2,661,027,442 0.55%
-------------------------------------------------------------------------------------------------------
High Yield Bond 1,130,770,710 0.55%
-------------------------------------------------------------------------------------------------------
Stock Index 2,353,108,247 0.35% to $4 bil
0.30% over $4 bil
-------------------------------------------------------------------------------------------------------
Value 1,245,014,298 0.40%
-------------------------------------------------------------------------------------------------------
Natural Resources 379,144,204 0.45%
-------------------------------------------------------------------------------------------------------
Government Income 484,312,354 0.40%
-------------------------------------------------------------------------------------------------------
Zero Coupon Bond 2005 66,841,050 0.40%
-------------------------------------------------------------------------------------------------------
Small Capitalization Stock 467,504,648 0.40%
-------------------------------------------------------------------------------------------------------
Jennison 1,436,742,496 0.60%
-------------------------------------------------------------------------------------------------------
Global 515,054,897 0.75%
-------------------------------------------------------------------------------------------------------
Jennison 20/20 Focus 64,658,172 0.75%
-------------------------------------------------------------------------------------------------------
Diversified Conservative Growth 157,063,832 0.75%
-------------------------------------------------------------------------------------------------------
SP Davis Value 164,766,949 0.75%
-------------------------------------------------------------------------------------------------------
SP Large Cap Value 38,310,158 0.80%
-------------------------------------------------------------------------------------------------------
SP Small / Mid Cap Value 98,706,491 0.90%
-------------------------------------------------------------------------------------------------------
SP AIM Core Equity 13,907,003 0.85%
-------------------------------------------------------------------------------------------------------
SP AIM Aggressive Growth 9,338,725 0.95%
-------------------------------------------------------------------------------------------------------
SP MFS Capital Opportunities 9,326,626 0.75%
-------------------------------------------------------------------------------------------------------
SP Mid-Cap Growth 17,977,405 0.80%
-------------------------------------------------------------------------------------------------------
SP Alliance Large Cap Growth 57,556,962 0.90%
-------------------------------------------------------------------------------------------------------
SP Alliance Technology Portfolio 6,536,855 1.15%
-------------------------------------------------------------------------------------------------------
SP INVESCO Small Company Growth 12,500,818 0.95%
-------------------------------------------------------------------------------------------------------
SP Deutsche International Equity Portfolio 46,324,671 0.90%
-------------------------------------------------------------------------------------------------------
SP Prudential U.S. Emerging Growth 51,159,411 0.60%
-------------------------------------------------------------------------------------------------------
SP Jennison International Growth 58,656,850 0.85%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
SP PIMCO Total Return 471,264,478 0.60%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
SP PIMCO High Yield 112,410,388 0.60%
-------------------------------------------------------------------------------------------------------
SP Conservative Asset Allocation 117,132,825 0.05%
-------------------------------------------------------------------------------------------------------
SP Balanced Asset Allocation 147,342,799 0.05%
-------------------------------------------------------------------------------------------------------
SP Growth Asset Allocation 96,090,965 0.05%
-------------------------------------------------------------------------------------------------------
SP Aggressive Growth Asset Allocation 15,016,415 0.05%
-------------------------------------------------------------------------------------------------------
SP Strategic Partners Focused Growth 17,311,059 0.90%
-------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA [TRUST] [ADVISOR FUNDS, INC.]
----------------------------------------------
INVESTMENT MANAGEMENT AGREEMENT
Agreement made this ___ day of ____, 2003, between American Skandia [Advisor Funds, Inc.] [Trust], a
[Maryland corporation][Massachusetts trust] (the Fund), and each of Prudential Investments LLC, a New York limited
liability company (PI) and American Skandia Investment Services, Inc. (ASISI).
W I T N E S S E T H
WHEREAS, the Fund is a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (the 1940 Act); and
WHEREAS, the Fund desires to retain PI and ASISI jointly to render or contract to obtain as hereinafter
provided investment advisory services to the Fund and the Fund also desires to avail itself of the facilities available
to PI and ASISI with respect to the administration of its day-to-day business affairs, and both PI and ASISI are willing
to render such investment advisory and administrative services; and
WHEREAS, the Fund desires to retain PI and ASISI to act as co-managers (in such joint capacity the
Co-Managers) with respect to the Fund; it being understood that PI, except as otherwise provided herein, shall oversee,
supervise and assist with ASISI's provision of investment advisory services to the Fund;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Co-Managers to act as manager of the Fund and each series thereof
set forth on Schedule A hereto (each a Portfolio) and as administrator of its business affairs for the period and on the
terms set forth in this Agreement. The Co-Managers accept such appointment and agree to render the services herein
described, for the compensation herein provided. Subject to the approval of the Board of [Directors][Trustees] of the
Fund, the Co-Managers are authorized to enter into one or more subadvisory agreements with any subadviser, whether or not
affiliated with the Manager (including, to the extent legally permissible, Prudential Investment Management, Inc. and
Jennison Associates LLC) (each, a Subadviser), pursuant to which such Subadviser shall furnish to the Fund and each
Portfolio investment advisory services in connection with the management of the Fund and such Portfolio (each, a
Subadvisory Agreement). Subject to the approval of the Board of [Directors][Trustees] of the Fund, the Co-Managers are
authorized to retain more than one Subadviser for each Portfolio, and if any Portfolio has more than one Subadviser, the
Co-Managers are authorized to allocate and reallocate the assets of such Portfolio among the Subadvisers to such
Portfolio. The Co-Managers will continue to have joint and several responsibility to the Fund and each Portfolio for all
investment advisory services furnished to the Fund and such Portfolio pursuant to any Subadvisory Agreement. The Fund and
Co-Managers understand and agree that the Co-Managers may manage the Fund and each Portfolio in a "manager-of-managers"
style with either a single Subadviser or multiple Subadvisers for such Portfolio, which contemplates that the Co-Managers
will, among other things and pursuant to an Order issued by the Securities and Exchange Commission (SEC): (i) continually
evaluate the performance of each Subadviser to such Portfolio, if applicable, through quantitative and qualitative
analyses and consultations with such Subadviser; (ii) periodically, and at least annually, make recommendations to the
Fund's Board as to whether the contract with each Subadviser should be renewed, modified, or terminated in respect of
such Portfolio; and (iii) periodically report to the Fund's Board regarding the results of its evaluation and monitoring
functions. The Fund recognizes that, subject to Board approval, a Subadviser's services in respect of the Fund or any
Portfolio may be terminated or modified pursuant to the "manager-of-managers" process, and that the Co-Managers may
appoint a new Subadviser for any Subadviser that is so removed.
2. Subject to the supervision of the Board of [Directors][Trustees] of the Fund, the Co-Managers
shall administer the Fund's business affairs and, in connection therewith, shall furnish the Fund with office facilities
and with clerical, bookkeeping and recordkeeping services at such office facilities and, subject to Section 1 hereof and
any Subadvisory Agreement, the Co-Managers shall manage the investment operations of the Fund and the composition of the
investment portfolio for each Portfolio, including the purchase, retention and disposition thereof, in accordance with
the Portfolio's investment objectives, policies and restrictions as stated in the Fund's SEC registration statement on
Form N-1A, as in effect from time to time (the Registration Statement), and subject to the following understandings:
(a) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to
such Portfolio under the Co-Managers' supervision) shall provide supervision of the Portfolio's
investments, and shall determine from time to time what investments or securities will be purchased,
retained, sold or loaned by the Portfolio, and what portion of the assets of such Portfolio will be
invested or held uninvested as cash.
(b) With respect to the Fund and each Portfolio, the Co-Managers, in the performance of
their duties and obligations under this Agreement, shall act in conformity with the [Articles of
Incorporation][Declaration of Trust] of the Fund and the Registration Statement and with the
instructions and directions of the Board of [Directors][Trustees] of the Fund, and will conform to and
comply with the requirements of the 1940 Act and all other applicable federal and state laws and
regulations. In connection therewith, the Co-Managers shall, among other things, prepare and file (or
cause to be prepared and filed) such reports as are, or may in the future be, required by the SEC).
(c) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to
such Portfolio under the Co-Managers' supervision) shall determine the securities and futures contracts
to be purchased or sold by such Portfolio and will place orders pursuant to their determinations with or
through such persons, brokers, dealers or futures commission merchants (including but not limited to
Prudential Securities Incorporated, to the extent legally permissible) in conformity with the policy
with respect to brokerage as set forth in the Registration Statement or as the Board of
[Directors][Trustees] may direct from time to time. In providing the Fund and each Portfolio with
investment supervision, it is recognized that the Co-Managers (or the Subadviser(s) to such Portfolio
under the Co-Managers' supervision) will give primary consideration to securing the most favorable price
and efficient execution. Consistent with this policy, the Co-Managers (or the Subadviser(s) to such
Portfolio under the Co-Managers' supervision) may consider the financial responsibility of or [research
and investment information and other services] provided by brokers, dealers or futures commission
merchants who may effect or be a party to any such transaction or other transactions to which other
clients of either of the Co-Manager (or Subadvisers) may be a party, the size and difficulty in
executing the order, and the value of the expected contribution of the broker dealer to the investment
performance of the Portfolio on a continuing basis. It is understood that, to the extent legally
permissible, Prudential Securities Incorporated (or a broker-dealer affiliated with a Subadviser) may be
used as principal broker for securities transactions, but that no formula has been adopted for
allocation of the Fund's investment transaction business for the Fund or any Portfolio. It is also
understood that it is desirable for the Fund and each Portfolio that the Co-Manager (or the
Subadviser(s) to such Portfolio) have access to supplemental investment and market research and security
and economic analysis provided by brokers or futures commission merchants, and that such brokers or
futures commission merchants may execute brokerage transactions at a higher cost to the Fund and such
Portfolio than may result when allocating brokerage to other brokers or futures commission merchants on
the basis of seeking the most favorable price and efficient execution. Therefore, the Co-Managers (and
the Subadviser(s) to such Portfolio under the Co-Manager's supervision) each is authorized to pay higher
brokerage commissions for the purchase and sale of securities and futures contracts for the Fund to
brokers or futures commission merchants who provide such research and analysis, subject to review by the
Fund's Board of [Directors][Trustees] from time to time with respect to the extent and continuation of
this practice. It is understood that the services provided by such broker or futures commission
merchant may be useful to the Co-Manager (or the Subadviser) in connection with its services to other
clients.
On occasions when the Co-Managers (or any Subadviser to such Portfolio under the Co-Managers'
supervision) deem the purchase or sale of a security or a futures contract to be in the best interest of
the Fund and such Portfolio as well as other clients of the Co-Managers (or such Subadviser), the
Co-Manager (or such Subadviser), to the extent legally permissible, may, but shall be under no
obligation to, aggregate the securities or futures contracts to be so sold or purchased in order to
obtain the most favorable price or lower brokerage commissions and efficient execution. In such event,
allocation of the securities or futures contracts so purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Co-Managers (or such Subadviser) in the manner it considers to
be the most equitable and consistent with its fiduciary obligations to the Fund and such Portfolio and
to such other clients.
(d) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to
such Portfolio under the Co-Managers' supervision) shall maintain all books and records with respect to
the Fund's and such Portfolio's portfolio transactions and shall render to the Fund's Board of Directors
such periodic and special reports as the Board may reasonably request.
(e) With respect to the Fund and each Portfolio, the Co-Managers (or the Subadviser(s) to
such Portfolio under the Co-Manager's supervision) shall be responsible for the financial and accounting
records to be maintained by the Fund and such Portfolio's (including those being maintained by the
Fund's custodian).
(f) With respect to the Fund and each Portfolio, the Co-Manager (or the Subadviser(s) to
such Portfolio under the Co-Managers' supervision) shall provide the Fund's custodian on each business
day information relating to all transactions concerning the assets of the Fund and such Portfolio.
(g) The investment management services of the Co-Managers under this Agreement are not to
be deemed exclusive, and the Co-Managers shall be free to render similar services to others.
(h) The Co-Managers shall make reasonably available their employees and officers for
consultation with any of the [Directors][Trustees] or officers or employees of the Fund with respect to
any matter discussed herein, including, without limitation, the valuation of the Fund's securities.
3. The Fund has delivered to the Co-Managers copies of each of the following documents and will
deliver to it all future amendments and supplements, if any:
(a) Articles of Incorporation or Declaration of Trust of the Fund;
(b) By-Laws of the Fund (such By-Laws, as in effect on the date hereof and as amended from
time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of [Directors][Trustees] of the Fund authorizing
the appointment of the Manager and approving the form of this agreement;
(d) Registration Statement under the 1940 Act and the Securities Act of 1933, as amended,
on Form N-1A, as filed with the SEC relating to the Fund and its shares of common stock and all
amendments thereto; and
(e) Each prospectus and statement of additional information of the Fund.
4. The Co-Managers shall authorize and permit any of their officers and employees who may be
elected as [Directors][Trustees] or officers of the Fund to serve in the capacities in which they are elected. All
services to be furnished by the Co-Managers under this Agreement may be furnished through the medium of any such officers
or employees of the Co-Managers.
5. The Co-Managers shall keep the Fund's books and records required to be maintained by it
pursuant to Paragraph 2 hereof. The Co-Managers agree that all records which it maintains for the Fund are the property
of the Fund, and they will surrender promptly to the Fund any such records upon the Fund's request, provided however that
the Co-Managers may retain a copy of such records. The Co-Managers further agree to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by the Co-Managers pursuant to
Paragraph 2 hereof.
6. During the term of this Agreement, the Co-Managers shall pay the following expenses:
(i) the salaries and expenses of all [Directors] [Trustees], officers and employees of the
Fund and the Co-Managers, except the fees and expenses of [Directors][Trustees] who
are not affiliated persons of the Co-Managers or any Subadviser,
(ii) all expenses incurred by the Co-Managers in connection with managing the ordinary
course of the Fund's business, other than those specifically assumed by the Fund
herein, and
(iii) the fees, costs and expenses payable to each Subadviser pursuant to a Subadvisory
Agreement.
The Fund assumes and will pay the expenses described below:
(a) the fees and expenses incurred by the Fund or any Portfolio in connection with the
management of the investment and reinvestment of its assets,
(b) the fees and expenses of Fund [Directors][Trustees] who are not "interested persons"
of the Fund within the meaning of the 1940 Act,
(c) the fees and expenses of the Custodian that relate to (i) the custodial function and
the recordkeeping connected therewith, (ii) preparing and maintaining the general accounting records of
the Fund and the provision of any such records to the Co-Managers useful to the Co-Managers in
connection with the Co-Managers' responsibility for the accounting records of the Fund pursuant to
Section 31 of the 1940 Act and the rules promulgated thereunder, (iii) the pricing or valuation of the
shares of the Fund, including the cost of any pricing or valuation service or services which may be
retained pursuant to the authorization of the Board of [Directors][Trustees] of the Fund, and (iv) for
both mail and wire orders, the cashiering function in connection with the issuance and redemption of the
Fund's securities,
(d) the fees and expenses of the Fund's Transfer and Dividend Disbursing Agent that relate
to the maintenance of each shareholder account,
(e) the charges and expenses of legal counsel and independent accountants for the Fund,
(f) brokers' commissions and any issue or transfer taxes chargeable to the Fund in
connection with its securities and futures transactions,
(g) all taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies,
(h) the fees of any trade associations of which the Fund may be a member,
(i) the cost of certificates representing, and/or non-negotiable share deposit receipts
evidencing, shares of the Fund,
(j) the cost of fidelity, directors' and officers' and errors and omissions insurance,
(k) the fees and expenses involved in registering and maintaining registration of the Fund
and of its shares with the SEC, and paying notice filing fees under state securities laws, including the
preparation and printing of the registration statement and the Fund's prospectuses and statements of
additional information for filing under federal and state securities laws for such purposes,
(l) allocable communications expenses with respect to investor services and all expenses
of shareholders' and [Directors'][Trustees'] meetings and of preparing, printing and mailing reports and
notices to shareholders in the amounts necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other extraordinary expenses not incurred
in the ordinary course of the Fund's business, and
(n) any expenses assumed by the Fund pursuant to a distribution and/or service plan
adopted in a manner that is consistent with Rule 12b-1 under the 1940 Act.
7. For the services provided and the expenses assumed by the Co-Managers pursuant to this
Agreement, the Fund will pay to ASISI as full compensation therefore a fee at the annual rate(s) as described on the
attached Schedule A with respect to the average daily net assets of the Fund. This fee will be computed daily, and will
be paid to ASISI monthly. The Fund shall not pay any fee or other compensation to PI for the services provided and the
expenses assumed pursuant to this Agreement. Provided, however, that upon any dissolution, liquidation or merger of
ASISI into PI, or in the event that ASISI is unable for any reason to perform its duties as specified in this Agreement,
PI shall be entitled to receive the same fees as formerly paid by the Fund to ASISI subject to the performance of the
obligations of the Co-Managers hereunder.
8. The Co-Managers shall not be liable for any error of judgment or for any loss suffered by the
Fund in connection with the matters to which this Agreement relates, except that the Co-Managers shall be jointly and
severally liable for any loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence on either Co-Manager's part in
the performance of their duties or from reckless disregard by either Co-Manager of their obligations and duties under
this Agreement. 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 Fund may
have under applicable law.
9. This Agreement shall continue in effect as to each Portfolio for a period of more than two
years from the date hereof only so long as such continuance is specifically approved at least annually in conformity with
the requirements of the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Fund or
any Portfolio at any time, without the payment of any penalty, by the Board of [Directors][Trustees] of the Fund or by
vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of such Portfolio, or by the
Co-Managers at any time, without the payment of any penalty, on not more than 60 days' nor less than 30 days' written
notice to the other party. This Agreement shall terminate automatically in the event of its assignment (as defined in
the 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right of any officer or employee of the
Co-Managers who may also be a [Director][Trustee], officer or employee of the Fund to engage in any other business or to
devote his or her time and attention in part to the management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the right of the Co-Managers to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association; provided that nothing in this paragraph
10 shall relieve the Co-Managers from the performance of any obligation hereunder.
11. Except as otherwise provided herein or authorized by the Board of [Directors][Trustees] of the
Fund from time to time, the Co-Managers shall for all purposes herein be deemed to be independent contractors, and shall
have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund or any
Portfolio.
12. During the term of this Agreement, the Fund agrees to furnish the Co-Managers at their
respective principal offices all prospectuses, proxy statements, reports to shareholders, sales literature, or other
material prepared for distribution to shareholders of the Fund or the public, which refer in any way to the Co-Managers
prior to use thereof and not to use such material if the Co-Managers reasonably object in writing within five business
days (or such other time as may be mutually agreed) after receipt thereof. In the event of termination of this Agreement,
the Fund will continue to furnish to the Co-Managers copies of any of the above- mentioned materials which refer in any
way to the Co-Managers. Sales literature may be furnished to the Co-Managers hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery. The Fund shall furnish or otherwise make available to the Co-Managers
such other information relating to the business affairs of the Fund as the Cop-Managers at any time, or from time to
time, reasonably request in order to discharge its obligations hereunder.
13. This Agreement may be amended by mutual consent, but the consent of the Fund must be obtained
in conformity with the requirements of the 1940 Act.
14. Any notice or other communication required to be given pursuant to this Agreement shall be
deemed duly given if delivered or mailed by registered mail, postage prepaid to the respective addresses indicated below;
provided that any party may, by written notice to the others, designate a different recipient or address for such party:
If to the Co-Managers: Prudential Investments LLC
Gateway Center Three
100 Mulberry Street, 4th Floor
Newark, NJ 07102-4077
Attention: President
and
American Skandia Investment Services,
Inc.
One Corporate Drive
Shelton, CT 06484
Attention:
If to the Fund: American Skandia [Trust] [Advisor
Funds, Inc.]
One Corporate Drive
Shelton, CT 06484
Attention:
Copy to:
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street, 4th Floor
Newark, NJ 07102-4077
Attention: President
15. This Agreement shall be governed by and construed in accordance with the laws of the State of
New York.
16. The Fund may use the name "___________ Fund [Portfolio]" or any name including the word
"Prudential," "Skandia," ["ASAF,"] ["AST,"] or "American Skandia" only for so long as this Agreement or any extension,
renewal or amendment hereof remains in effect, including any similar agreement with any organization which shall have
succeeded to the Co-Managers' business as Co-Managers or any extension, renewal or amendment thereof remain in effect.
At such time as such an agreement shall no longer be in effect, the Fund will (to the extent that it lawfully can) cease
to use such a name or any other name indicating that it is advised by, managed by or otherwise connected with the
Co-Managers, or any organization which shall have so succeeded to such businesses. In no event shall the Fund use the
name "___________ Fund [Portfolio]." or any name including the word "Prudential," "Skandia," ["ASAF,"] ["AST,"] or
"American Skandia" if the Co-Managers' functions are transferred or assigned to a company of which The Prudential
Insurance Company of America does not have control. Further provided, that the Fund's right to use the words "Skandia,"
["ASAF,"] ["AST,"] or "American Skandia" shall also be subject to the terms, conditions, restrictions and limitations
governing the use of such words as set forth in any licensing or similar agreement(s) that may then be in effect between
Prudential Financial, Inc. and Skandia Insurance Company Ltd. Or their successors or assigns.
17. Liability of the Trustees and Shareholders. A copy of the Agreement and Declaration of Trust
-------------------------------------------
of the Trust is on file with the Secretary of the Commonwealth of Massachusetts, and notice is hereby given that this
instrument are not binding upon any of the Trustees or shareholders individually but is binding only upon the assets and
property of the Trust.
18. 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 related 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, intending to be legally bound, have caused this instrument to be
executed by their officers designated below as of the day and year above written.
AMERICAN SKANDIA [TRUST] [ADVISOR FUNDS, INC.]
By: _____________________________
PRUDENTIAL INVESTMENTS LLC
By: ____________________________
AMERICAN SKANDIA INVESTMENT SERVICES, INCORPORATED
By:______________________________
Schedule A
---------------------------------------------------------------------
________________Fund
Schedule dated _______, 2003.
One Corporate Drive
PO Box 883
Shelton, CT 06484
CONSOLIDATED VOTING INSTRUCTION CARD
This EzVote Consolidated voting instruction card may be used to give
voting instructions for all of your variable insurance contracts registered
to the same Social Security or Tax I.D. number at this address in all
investment portfolios ("Funds") of American Skandia Trust. By signing
the consolidated voting instruction card below, you are giving voting
instructions for all of the affected accounts in the same manner.
If you would like to give instructions for each of your accounts separately,
use the individual ballots on the reverse side of this card.
Your ezVote Control Number is **** 999 999 999 999 99 ***
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the enclosed postage paid envelope, to Proxy Tabulator, P.O.
Box 91XX, Hingham, MA 02043.
COMPLETE AND RETURN THE FOLLOWING IF YOU CHOOSE TO GIVE VOTING INSTRUCTIONS BY PAPER BALLOT
AMERICAN SKANDIA TRUST
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the Proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received
from policy owners.
CONSOLIDATED BALLOT
If you are giving instructions by consolidated ballot, please fill in box(es) as shown using black or blue ink or number
2 pencil. PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
2. Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
Date: _______________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
-----------------------------------------
Sign here exactly as name appear(s) on left. (Please sign in box)
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," "Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
AST-EZ VIC
INDIVIDUAL BALLOTS: USE ONLY IF YOU WISH TO GIVE VOTING INSTRUCTIONS FOR EACH ACCOUNT INDIVIDUALLY.
Please fill in box(es) as shown using black or blue ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS.
TRUSTEE NOMINEES:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
*(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number of the Nominee(s) on the
line provided below.)
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. NOT APPLICABLE
7. NOT APPLICABLE
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. APPROVE CHANGE W/RESPECT TO SINGLE ISSUER
6. NOT APPLICABLE
7. APPROVE RECLASSIFICATION
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. NOT APPLICABLE
7. APPROVE RECLASSIFICATION
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. APPROVE CHANGE W/RESPECT TO SINGLE ISSUER
6. APPROVE CHANGE W/RESPECT TO DIVERSIFICATION
7. NOT APPLICABLE
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. APPROVE CHANGE WITH RESPECT TO DIVERSIFICATION
7. NOT APPLICABLE
One Corporate Drive
PO Box 883
Shelton, CT 06484
CONSOLIDATED VOTING INSTRUCTION CARD
This EzVote Consolidated voting instruction card may be used to give
voting instructions for all of your variable insurance contracts registered
to the same Social Security or Tax I.D. number at this address in all
investment portfolios ("Funds") of American Skandia Trust. By signing
the consolidated voting instruction card below, you are giving voting
instructions for all of the affected accounts in the same manner.
If you would like to give instructions for each of your accounts separately,
use the individual ballots on the reverse side of this card.
Your ezVote Control Number is **** 999 999 999 999 99 ***
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the enclosed postage paid envelope, to Proxy Tabulator, P.O.
Box 91XX, Hingham, MA 02043.
COMPLETE AND RETURN THE FOLLOWING IF YOU CHOOSE TO GIVE VOTING INSTRUCTIONS BY PAPER BALLOT
AMERICAN SKANDIA TRUST
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the Proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received
from policy owners.
CONSOLIDATED BALLOT
If you are giving instructions by consolidated ballot, please fill in box(es) as shown using black or blue ink or number
2 pencil. PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
2. Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
Date: _______________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
-----------------------------------------
Sign here exactly as name appear(s) on left. (Please sign in box)
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," "Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
AST-EZ VIC
INDIVIDUAL BALLOTS: USE ONLY IF YOU WISH TO GIVE VOTING INSTRUCTIONS FOR EACH ACCOUNT INDIVIDUALLY.
Please fill in box(es) as shown using black or blue ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS.
TRUSTEE NOMINEES:
(09) Saul K. Fenster
(10) Delayne Dedrick Gold
(11) W. Scott McDonald, Jr.
(12) Thomas T. Mooney
(13) Louis A. Weil
(14) Robert F. Gunia
(15) John A. Pileski
(16) David R. Odenath, Jr.
*(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number of the Nominee(s) on the
line provided below.)
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. NOT APPLICABLE
7. NOT APPLICABLE
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. APPROVE CHANGE W/RESPECT TO SINGLE ISSUER
6. NOT APPLICABLE
7. APPROVE RECLASSIFICATION
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. NOT APPLICABLE
7. APPROVE RECLASSIFICATION
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. APPROVE CHANGE W/RESPECT TO SINGLE ISSUER
6. APPROVE CHANGE W/RESPECT TO DIVERSIFICATION
7. NOT APPLICABLE
-----------------
CONTROL NO.
XXX XXXXXXXXXX XXX
NAME PRINTS HERE
NAME PRINTS HERE
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
FOR AGAINST ABSTAIN
1. APPROVE MANAGEMENT AGREEMENT
2. ELECTION OF TRUSTEES
(REFER TO NOMINEES AT TOP OF PAGE)
FOR ALL
EXCEPT*
WITHHOLD
AUTHORITY
FOR ALL
FOR AGAINST ABSTAIN
3. APPROVE CHANGE W/RESPECT TO LENDING
4. APPROVE CHANGE W/RESPECT TO BORROWING
5. NOT APPLICABLE
6. APPROVE CHANGE WITH RESPECT TO DIVERSIFICATION
7. NOT APPLICABLE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2. Election of Trustees:
(01) Saul K. Fenster (05) Louis A. Weil, III
(02) Delayne Dedrick Gold (06) Robert F. Gunia
(03) W. Scott McDonald, Jr. (07) John A. Pileski
(04) Thomas T. Mooney (08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. NOT APPLICABLE.
7. NOT APPLICABLE.
AST1
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN STANDARD
TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1.
To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
2.
Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. NOT APPLICABLE.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
AST2
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
2.Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4.To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. NOT APPLICABLE.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
AST3
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2. Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4.To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. NOT APPLICABLE.
AST4
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY AMERICAN SKANDIA LIFE ASSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2.
Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. NOT APPLICABLE.
PLEASE SIGN ON REVERSE SIDE
AST5
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2. Election of Trustees:
(01) Saul K. Fenster (05) Louis A. Weil, III
(02) Delayne Dedrick Gold (06) Robert F. Gunia
(03) W. Scott McDonald, Jr. (07) John A. Pileski
(04) Thomas T. Mooney (08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. NOT APPLICABLE.
7. NOT APPLICABLE.
AST1
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTE
SHARES OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN STANDARD
TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1.
To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
2.
Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. NOT APPLICABLE.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
AST2
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio, American Skandia
Investment Services, Inc. and Prudential Investments LLC .
2.Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4.To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. NOT APPLICABLE.
7. To approve the reclassification of certain fundamental investment restrictions from "fundamental" to
"non-fundamental".
AST3
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2. Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of
the Nominee(s) on the line provided below):
FOR AGAINST ABSTAIN
3.To approve a change to a fundamental investment restriction with respect to lending.
4.To approve a change to a fundamental investment restriction with respect to borrowing.
5. To approve a change to a fundamental investment restriction with respect to investment in a single issuer.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. NOT APPLICABLE.
AST4
PLEASE SIGN ON REVERSE SIDE
One Corporate Drive
PO Box 883
Shelton, CT 06484
2 EASY WAYS TO GIVE VOTING INSTRUCTIONS
1. On the Internet at www.americanskandia.com, look for LINK
to "Proxyweb" and use the control number shown.
2. Sign, Date and Return this voting instruction card using the
enclosed postage paid envelope, to Proxy Tabulator,
P.O. Box 91XX, Hingham, MA 02043.
*** CONTROL NUMBER: 999 999 999 999 99 ***
INSURANCE/ASSURANCE COMPANY NAME PRINTS HERE
PORTFOLIO NAME PRINTS HERE
VOTING INSTRUCTIONS ARE BEING SOLICITED BY KEMPER INVESTORS LIFE INSURANCE COMPANY (THE "COMPANY") IN ORDER TO VOTESHARES
OF THE PORTFOLIOS OF AMERICAN SKANDIA TRUST HELD BY THE COMPANY'S SEPARATE ACCOUNT AT THE SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD AT ONE CORPORATE DRIVE, SHELTON, CONNECTICUT 06484 ON APRIL 3, 2003 AT 10:00 A.M. EASTERN
STANDARD TIME.
You are entitled to direct the Company on the voting of shares attributable to your interest in your variable insurance
policy.
Every properly signed voting instruction card will be voted in the manner specified hereon and, in the absence of
specification, will be voted FOR the proposals. If you do not respond, the Company will vote all shares attributable to
your policy in proportion to the voting instructions actually received from policy owners.
Date:________________________________________
PLEASE SIGN, DATE AND RETURN PROMPTLY.
Receipt of Notice of Special Meeting and Proxy Statement
is hereby acknowledged.
(Please sign in box)
Sign here exactly as name appear(s) on left.
Joint owners should each sign personally. If only one signs, his or her
signature will be binding. If the contract owner is a trust, custodial account
or other entity, the name of the trust or the custodial account should be
entered and the trustee, custodian, etc. should sign in his or her own name,
indicating that he or she is "Trustee," ""Custodian," or other applicable
designation. If the contract owner is a partnership, the partnership should
be entered and the partner should sign in his or her own name, indicating
that he or she is a "Partner".
Please fill in box(es) as shown using black or blue ink or number 2 pencil.
PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN
1. To approve a new investment management agreement between the Trust on behalf of the Portfolio,
American Skandia Investment Services, Inc. and Prudential Investments LLC .
2.
Election of Trustees:
(01) Saul K. Fenster
(02) Delayne Dedrick Gold
(03) W. Scott McDonald, Jr.
(04) Thomas T. Mooney
(05) Louis A. Weil, III
(06) Robert F. Gunia
(07) John A. Pileski
(08) David R. Odenath, Jr.
FOR all
nominees
listed at left
(except
as marked to
the contrary)
WITHHOLD
AUTHORITY
to vote for all
nominees
listed.
(INSTRUCTION: To withhold authority to vote for any individual Nominee(s), write the number(s) of the Nominee(s) on the
line provided below):
FOR AGAINST ABSTAIN
3. To approve a change to a fundamental investment restriction with respect to lending.
4. To approve a change to a fundamental investment restriction with respect to borrowing.
5. NOT APPLICABLE.
6. To approve a change to a fundamental investment restriction with respect to diversification.
7. NOT APPLICABLE.
PLEASE SIGN ON REVERSE SIDE
AST5