Investment Company Act No. 811-08085
As filed with the Securities and Exchange Commission on December 18, 1998
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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
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American Skandia Advisor Funds, Inc.
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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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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
AMERICAN SKANDIA ADVISOR FUNDS, INC.
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF THE
ASAF MARSICO CAPITAL GROWTH FUND
To be held
February 5, 1999
To the Shareholders of the ASAF Marsico Capital Growth Fund of American Skandia
Advisor Funds, Inc.:
Notice is hereby given that a Special Meeting of Shareholders of the
ASAF Marsico Capital Growth Fund (the "Fund") of American Skandia Advisor Funds,
Inc. (the "Company") will be held at One Corporate Drive, Shelton, Connecticut
06484 on February 5, 1999 at 10:00 a.m. Eastern Time, or at such adjourned time
as may be necessary for the holders of a majority of the outstanding shares of
the Fund to vote (the "Meeting"), for the following purposes:
I. To consider the approval of a new Sub-Advisory Agreement between American
Skandia Investment Services, Incorporated and Marsico Capital Management, LLC
regarding investment advice to ASAF Marsico Capital Growth Fund.
II. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
The matters referred to above are discussed in detail in the Proxy
Statement attached to this Notice. The Board of Directors has fixed the close of
business on December 14, 1998 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 Fund is entitled to one vote with
respect to a proposal on which the Fund's shareholders are entitled to vote.
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 (or
forms) of proxy and return it promptly in the envelope provided for that
purpose. The proxy is being solicited on behalf of the Board of Directors.
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE UNNECESSARY EXPENSE OF FURTHER
SOLICITATION, WE URGE YOU TO INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY
(OR PROXIES), DATE AND SIGN IT, AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED,
NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. YOU MAY REVOKE THE PROXY AT
ANY TIME PRIOR TO ITS 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 Directors
Eric C. Freed
Secretary
American Skandia Advisor Funds, Inc.
January 4, 1999
<PAGE>
PROXY STATEMENT
AMERICAN SKANDIA ADVISOR FUNDS, INC.
P.O. Box 8012
Boston, Massachusetts 02266-8012
SPECIAL MEETING OF SHAREHOLDERS OF THE
ASAF MARSICO CAPITAL GROWTH FUND
To be held
February 5, 1999
This proxy statement and enclosed form of proxy are being furnished in
connection with the solicitation of proxies by the Board of Directors of
American Skandia Advisor Funds, Inc. (the "Company") for use at a Special
Meeting of the Shareholders of the ASAF Marsico Capital Growth Fund (the "Fund")
of the Company to be held at One Corporate Drive, Shelton, Connecticut 06484 on
February 5, 1999, at 10:00 a.m. Eastern 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 January 6, 1999.
Voting instructions will be solicited principally by mailing this Proxy
Statement and its enclosures, but proxies also may be solicited by telephone,
telegraph, or in person by officers or agents of the Company. The Company has
engaged D.F. King & Co., Inc. ("D.F. King") to assist in the solicitation of
proxies, for a fee that is not expected to exceed $4,000 plus reasonable
out-of-pocket expenses for mailing and telephone costs. Neither the Company nor
the Funds will pay any of the costs of the Meetings, including the costs related
to the solicitation of proxies.
You may call D.F. King toll free at 1-800-859-8511 and authorize D.F.
King to sign a proxy on your behalf. In addition, as the meeting date
approaches, you may receive a phone call from a representative of D.F. King if
the Company has not yet received your vote. D.F. King may ask you for authority,
by telephone, to permit D.F. King to sign a proxy on your behalf. D.F. King will
record all instructions it receives from shareholders by telephone, and the
proxies it signs in accordance with those instructions, in accordance with the
procedures set forth below that are intended to determine accurately the
shareholder's identity and voting instructions.
When soliciting a proxy by telephone, the D.F. King representative is
required to ask you for your full name, address, social security or employer
identification number, title (if the person giving the proxy is authorized to
act for an entity, such as a corporation), the number of shares of a Fund owned
and to confirm that you have received the proxy statement in the mail. The D.F.
King representative will then explain the voting process. D.F. King is not
permitted to recommend to you how to vote, other than to read any recommendation
included in the proxy statement. D.F. King will record your instructions and
transmit them to the official tabulator and, within 72 hours, send you a letter
or mailgram to confirm your vote. The letter will also ask you to call D.F. King
immediately if the confirmation does not reflect your instructions correctly.
The Company will forward proxy materials to record owners for any beneficial
owners that such record owners may represent. Neither the Company nor the Fund
will pay any of the costs of the Meeting, including the costs related to the
solicitation of proxies.
The Annual Report of the Company, including audited financial
statements for the fiscal year ended October 31, 1998 (the "Report"), has been
sent to shareholders. The Company will furnish additional copies of the Report
to a shareholder upon request, without charge, by writing to the Company at the
above address or by calling 1-800-752-6342.
Shareholders of record at the close of business on December 14, 1998
(the "Record Date") are entitled to notice of, and to vote at, the Meetings.
Each shareholder is entitled to one vote for each full share. As of the Record
Date, 4,131,004 shares of capital stock of the Fund were outstanding.
American Skandia Investment Services, Incorporated ("ASISI") is the
investment manager for all the Company's funds, including the Fund. ASISI is a
wholly-owned subsidiary of American Skandia Investment Holding Corporation
("ASIHC"). ASIHC is also the owner of all the outstanding shares of American
Skandia Marketing, Incorporated ("ASM"), which is the distributor of the Fund.
The principal offices of ASISI, ASIHC and ASM are located in the same building
at One Corporate Drive, Shelton, Connecticut 06484.
Under a Sub-Advisory Agreement with ASISI, Marsico Capital Management,
LLC ("Marsico Capital") serves as sub-advisor to the Fund and, subject to the
supervision and control of ASISI and the Board of Directors, determines the
securities to be purchased for and sold from the Fund. Marsico Capital, located
at 1200 17th Street, Suite 1300, Denver, Colorado 80202, was organized in
September 1997. The Chairman and Chief Executive Officer, of Marsico Capital is
Thomas F. Marsico Mr. Marsico's address is 1200 17th Street, Suite 1300, Denver,
Colorado 80202. 100% of the voting interests in Marsico Capital currently are
owned of record by Mr. Marsico and TFM Holdings LLLP ("TFM Holdings"). TFM is a
Colorado limited liability partnership whose partners are Mr. Marsico and
certain other employees of Marsico Capital.
The Administrator of the Funds, and every other fund of the Company, is
PFPC Inc., a Delaware corporation located at 103 Bellevue Parkway, Wilmington,
Delaware 19809.
Shareholders of the Fund are being asked to consider and vote on a new
sub-advisory agreement for the Fund. As explained in more detail below, the
existing sub-advisory agreements for the Fund will terminate automatically, by
operation of law, upon the consummation of a transaction (the "Transaction")
between Marsico Capital and NationsBank N.A. ("NationsBank"), a subsidiary of
BankAmerica Corporation and a national bank organized under the laws of the
United States, in which NationsBank will acquire 50% of the voting control of
Marsico Capital. Shareholders are not being asked to approve the Transaction;
rather, they are being asked to continue the existing sub-advisory relationship
for the Fund under new contract (the "Sub-Advisory Agreement"). The Transaction
and the terms of the New Sub-Advisory Agreement are discussed below. Other than
the date of the agreement, the proposed New Sub-Advisory Agreement is identical
in form and terms to the present agreement.
All shares of the Fund held by a shareholder of the Fund will be voted
by the Company in accordance with voting instructions received from such
shareholder. Proxies submitted without voting instructions will be voted FOR the
proposal set forth in the Notice. The Company has fixed the close of business on
February 4, 1999 as the last day on which proxies will be accepted.
<PAGE>
PROPOSAL
APPROVAL OF A NEW SUB-ADVISORY AGREEMENT BETWEEN AMERICAN SKANDIA
INVESTMENT SERVICES, INCORPORATED AND MARSICO CAPITAL MANAGEMENT, LLC
Background
The Fund. Since the Fund commenced operations on August 19, 1998, ASISI
has served as investment adviser to the Fund pursuant to an Investment
Management Agreement (the "Investment Management Agreement") with the Company.
The Investment Management Agreement, effective August 19, 1998, provides, among
other things, that in carrying out its responsibility to supervise and manage
all aspects of the Fund's operations, ASISI may engage, subject to the approval
of the Board of Directors and, where required, the shareholders of the Fund, a
sub-advisor to provide advisory services in relation to the Fund. Under the
Investment Management Agreement, ASISI may delegate to a sub-advisor the duty,
among other things, to formulate and implement the Fund's investment program,
including the duty to determine what issuers and securities will be purchased
for and sold from the Fund. In accordance with this provision for delegation of
authority, ASISI entered into a sub-advisory agreement (the "Existing
Sub-Advisory Agreement"), effective August 19, 1998 with Marsico Capital,
pursuant to which those duties were delegated to Marsico Capital.
Marsico Capital has served as sub-advisor to the Fund since it commenced
operations.
The Existing Sub-Advisory Agreement was approved by the Board of
Directors, including a majority of the Directors who are not "interested
persons" of the Company (as defined under the Investment Company Act) (the
"Independent Directors"), on June 2, 1998. The Existing Sub-Advisory Agreement
was not, and was not required to be, approved by the shareholders of the Fund
after the Fund commenced operations.
The Transaction. On November 5, 1998 Thomas F. Marsico, Chairman and
Chief Executive Officer of Marsico Capital, and TFM Holdings and other related
entities (the "Marsico Entities"), entered into a transaction agreement (the
"Transaction Agreement") with NationsBank pursuant to which the Marsico Entities
have agreed to sell to NationsBank (i) 100% of the ownership interest in Marsico
Management Holdings ("MMH"), a Delaware limited liability company and (ii) a 50%
ownership interest in Marsico Capital. Mr. Marsico, TFM Holdings and a trust for
the benefit of members of Mr. Marsico's family will receive $120 million in cash
in connection with the sale of such interests. Upon the closing of the
Transaction, MMH will become a wholly-owned subsidiary of NationsBank. In
addition, NationsBank expects to contribute its ownership interest in Marsico
Capital to MMH, so that Marsico Capital will be a 50%-owned subsidiary of MMH.
Following the completion of the Transaction, the Limited Liability
Company Agreement of Marsico Capital will be amended and restated ("Amended LLC
Agreement") to reflect the change in ownership of Marsico Capital. Under the
Amended LLC Agreement, Marsico Capital will be managed by a board of directors
consisting of six members, three to be appointed by TFM Holdings and three to be
appointed by NationsBank.
The names and principal occupations of the initial directors appointed
by TFM Holdings are as follows: Thomas F. Marsico, Chairman and Chief Executive
Officer of Marsico Capital; Barbara M. Japha, President of Marsico Capital; and
Christopher J. Marsico, Chief Operating Officer of Marsico Capital. The address
for each of these individuals is 1200 17th Street, Suite 1300, Denver, CO,
80202.
The names, principal occupations and addresses of the initial
NationsBank designated directors of MCM are as follows: Owen G. (Bob) Shell,
Jr., President, Wealth Management, NationsBank N.A., NationsBank Plaza, 800
Market St., St. Louis, MO, 63101-2607; Michael E. O'Neill, President, Principal
Investment and Wealth Management, BankAmerica Corp., 40th Floor, 555 California
Street, San Francisco, CA 94104; and Robert H. Gordon, Senior Vice President,
Consumer Investing Group, NationsBank N.A., and President of NationsBanc
Advisors Inc., NationsBank Plaza, 101 S. Tryon St., Charlotte, NC 28255-0001.
The Transaction is subject to a number of conditions, including the
receipt of shareholder approval of other investment company portfolios for which
Marsico Capital serves in an investment advisory capacity, as well as the
consent of Marsico Capital's other investment advisory clients. Moreover,
certain regulatory approvals may need to be obtained prior to the consummation
of the Transaction.
Shareholder approval of the New Sub-Advisory Agreement is being sought
because the Transaction will result in an "assignment" (as defined by the
Investment Company Act) of the Existing Sub-Advisory Agreement, resulting in the
Existing Sub-Advisory Agreement's automatic termination.
The Company has been advised that the Transaction will not affect
Marsico Capital's day-to-day operations, its investment process or its portfolio
management team. Thomas F. Marsico, who has managed the Fund since its
inception, will continue to serve as the Chairman and Chief Executive Officer of
Marsico Capital and to manage the Fund following completion of the Transaction.
NationsBank. NationsBank, a national banking association having its
principal place of business in Charlotte, North Carolina, is a subsidiary of
BankAmerica Corporation. The merger of BankAmerica Corporation and NationsBank
Corporation on September 30, 1998 resulted in the second largest banking
organization in the United States, BankAmerica Corporation, with approximately
$570 billion in assets serving approximately 30 million households, as well as
the world's largest banking group in terms of market capitalization (over $139.5
billion).
Based on Securities and Exchange Commission ("SEC") filings,
NationsBank has informed the Company that it is not aware of any persons who, as
of September 30, 1998, either individually or as a group, beneficially owned
more than 10% of BankAmerica Corporation's outstanding voting securities.
The information set forth above concerning Marsico Capital, NationsBank
and the Transaction has been provided to the Fund by Marsico Capital.
Evaluation of the Board of Directors
At a meeting of the Board of Directors of the Company held in person on
December 16, 1998, the Board of Directors gave approval to the New Sub-Advisory
Agreement, and authorized the officers of the Company to prepare this proxy
statement. At the meeting, the terms and conditions of the New Sub-Advisory
Agreement were reviewed with the Board of Directors and the Board of Directors
received information concerning the Transaction and its anticipated effect upon
Marsico Capital's ability to perform its responsibilities in respect of the
Fund. In evaluating the New Sub-Advisory Agreement, the Board of Directors
considered the fact that the Existing Sub-Advisory Agreement is identical to the
New Sub-Advisory Agreement (except for its effective date), including the terms
relating to the services to be provided and the fees to be paid to Marsico
Capital thereunder. The Board of Directors considered the performance of Marsico
Capital to date in providing services to the Fund, and the skills and
capabilities of the personnel of Marsico Capital.
The Board of Directors considered to be particularly important
assurances from Marsico Capital and NationsBank that the Transaction, if
completed, will not have any adverse effect on the nature, quality or extent of
the services that Marsico Capital provides to the Fund. The Board of Directors
also considered assurances from Marsico Capital and NationsBank that Marsico
Capital would operate separately from NationsBank with substantial autonomy, and
that it was not NationsBank's intention to attempt to influence Marsico
Capital's investment decisions. In addition, the Board of Directors considered
the facts that Thomas F. Marsico would continue to serve as Chairman and Chief
Executive Officer of Marsico Capital and to have a significant ownership
interest in Marsico Capital, that Mr. Marsico would continue to manage the Fund
and that appropriate incentives will be continued to retain other members of the
senior management of Marsico Capital and to assure that Marsico Capital will
continue to furnish high quality services to the Fund. The Board of Directors
also considered NationsBank's substantial resources.
Based on the Board of Directors' review and their evaluation of the
materials they received, and in consideration of all factors deemed relevant to
them, the Board of Directors determined that the New Sub-Advisory Agreement is
in the best interests of the Fund and its shareholders. Accordingly, the Board
of Directors, including all of the Independent Directors, voted to recommend
that the Fund's shareholders vote to approve the New Sub-Advisory Agreement.
The New and Existing Sub-Advisory Agreements
The New Sub-Advisory Agreement, which is attached to this Proxy
Statement as Exhibit A, will become effective as of the consummation of the
Transaction, contingent upon approval by the shareholders of the Fund. If the
shareholders approve the New Sub-Advisory Agreement, it will remain in effect
for an initial term of one year from its effective date, and may be renewed
annually thereafter by specific approval of the Board of Directors or the
shareholders of the Fund. As discussed above, all of the terms and provisions of
the New Sub-Advisory Agreement, other than its effective date, are the same as
those of the Existing Sub-Advisory Agreement. Those terms and provisions are
summarized below.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, Marsico Capital will agree to furnish the
Investment Manager with investment advisory services in connection with
continuous investment programs for the Fund, which is to be managed in
accordance with its investment objectives, investment policies and restrictions
as set forth in the Prospectus and Statement of Additional Information of the
Company and in accordance with the Company's Articles of Incorporation and
By-laws. Subject to the supervision and control of the Investment Manager, which
in turn will be subject to the supervision and control of the Board of
Directors, Marsico Capital, in its discretion, will determine and select the
securities to be purchased for and sold from the Fund and place orders with and
give instructions to brokers, dealers and others to cause such transactions to
be executed.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, sub-advisory fees are payable by ASISI, not by
the Fund or its shareholders. For its fee, Marsico Capital will agree to furnish
at its expense all necessary investment facilities, including salaries of
personnel, required for it to execute its duties under the New Sub-Advisory
Agreement. Marsico Capital's compensation for the services provided under the
New Sub-Advisory Agreement will be computed at an annual rate and will be
payable monthly in arrears, based on the average daily net assets of the Fund
for each month. For all services rendered to the Fund, ASISI will calculate and
pay Marsico Capital at the annual rate of .45% of the Fund's average daily net
assets. The aggregate fee paid by ASISI to Marsico Capital for services rendered
under the Existing Sub-Advisory Agreement for the period from August 19, 1998
(commencement of operations) to October 31, 1998 was $ .
The New Sub-Advisory Agreement is renewable annually by specific
approval of the Board of Directors or by vote of a majority of the outstanding
voting securities of the Fund (as defined under the Investment Company Act). Any
renewal by the Board requires the approval by the vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such renewal. The New Sub-Advisory Agreement may be terminated at any
time without penalty upon 60 days' written notice to the other party to the
agreement, and will automatically terminate in the event of its "assignment" by
either party (as defined under the Investment Company Act) or (provided Marsico
Capital has received prior written notice thereof) upon termination of the
Investment Management Agreement.
Under the terms of the New Sub-Advisory Agreement, as under the
Existing Sub-Advisory Agreement, in the absence of willful misconduct, bad
faith, gross negligence or reckless disregard by Marsico Capital of its
obligations under the New Sub-Advisory Agreement, Marsico Capital shall not be
liable to the Company, the Fund, the Fund's shareholders or ASISI for any loss
suffered by such persons in connection with the services provided under the New
Sub-Advisory Agreement. The New Sub-Advisory Agreement provides, however, that
the foregoing provision does not constitute a waiver of any rights that the
Company, the Fund, or ASISI may have under applicable law.
<PAGE>
Information Concerning Marsico Capital
Marsico Capital provides investment advice to registered investment
companies that are distributed to retail investors as well as investment
companies that serve as funding vehicles for variable life insurance policies
and variable annuity contracts. As of September 30, 1998 Marsico Capital served
as advisor or sub-advisor to nine registered investment company portfolios.
These nine portfolios had aggregate assets of approximately $1.8 billion as of
September 30, 1998. Marsico Capital also provides investment advice to
institutions other than registered investment companies and to individuals.
The following table lists other investment companies or investment
company portfolios for which Marsico Capital acts as investment advisor or
sub-advisor that have similar investment objectives as the Fund, as well as the
rate of advisory or sub-advisory compensation payable to Marsico Capital and the
net assets of the fund or portfolio.
- ------------------- ------------- --------------- ------------ ----------------
FUND OBJECTIVE INVESTMENT FEE RATE NET ASSETS AS
ADVISER OF SEPTEMBER
OR 30, 1998
SUB-ADVISOR
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Marsico Focus Fund Capital Investment .45% $860,000,000
Growth Advisor
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Marsico Growth & Capital Investment .45% $261,000,000
Income Fund Growth Advisor
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Nations Marsico Capital Investment .45% $184,000,000
Focused Equities Growth Advisor
Fund
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Nations Marsico Capital Investment .45% $63,000,000
Growth & Income Growth Advisor
Fund
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Nations Annuity Capital Investment .45% $14,000,000
Trust -Nations Growth Advisor
Marsico Focused
Equities Fund
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
Nations Annuity Capital Investment .45% $10,000,000
Trust-Nations Growth Advisor
Marsico Growth &
Income Fund
- ------------------- ------------- --------------- ------------ ----------------
- ------------------- ------------- --------------- ------------ ----------------
American Skandia Capital Sub-Advisor .45% $383,679,000
Trust - AST Growth
Marsico Capital
Growth Portfolio
- ------------------- ------------- --------------- ------------ ----------------
Marsico Capital was established in September 1997 by Thomas F. Marsico
and TFM Holdings. It is a Delaware limited liability company. The principal
source of Marsico Capital's income is professional fees received from providing
continuing investment advice. Mr. Marsico is the Chairman and Chief Executive
Officer of Marsico Capital and also is President and Chief Investment Officer of
the Marsico Focus Fund and the Marsico Growth & Income Fund, registered mutual
fund portfolios. Prior to forming Marsico Capital, Mr. Marsico served as
Executive Vice President and Portfolio Manager at Janus Capital Corporation
("Janus"). Mr. Marsico joined Janus in 1986 and served as the Portfolio Manager
of the Janus Twenty Fund from January 31, 1988 through August 11, 1997 and
served in the same capacity for the Janus Growth and Income Fund from May 31,
1991 (that fund's inception) through August 11, 1997.
The Board of Directors of Marsico Capital is presently comprised of Thomas
F. Marsico, the chairman and Chief Executive Officer of Marsico Capital; Barbara
M. Japha, the President of Marsico Capital; and Christopher J. Marsico, Chief
Operating Officer of Marsico Capital.
All of the outstanding interests of Marsico Capital are held of record
by Thomas F. Marsico and TFM Holdings.
Section 15(f). The Company has been informed by Marsico Capital and
NationsBank that they intend to comply with Section 15(f) of the Investment
Company Act. Section 15(f) provides a non-exclusive "safe harbor" for an
investment adviser or any of its affiliated persons to receive any amount or
benefit in connection with a change in control of the investment advisor as long
as two conditions are met. First, for a period of three years after the change
of control, at least 75% of the board members of the investment company must not
be "interested persons" of the adviser or the predecessor advisor. Second, an
"unfair burden" must not be imposed on the investment company as a result of the
transaction or any express or implied terms, conditions, or understandings
applicable thereto. The term "unfair burden" is defined in Section 15(f) to
include any arrangement during the two-year period after the transaction whereby
the investment advisor, or any interested person of any such advisor, 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 for such investment company). None of the Company's Board of
Directors are interested persons of Marsico, NationsBank or BankAmerica
Corporation. In addition, the Company has been advised that none of Marsico
Capital, NationsBank or BankAmerica Corporation, or any other party that is an
interested person of Marsico Capital will take any action, either before or for
a period of three years after the Transaction, that would have the effect of
imposing an "unfair burden" on the Company as a result of the Transaction.
Marsico Capital has undertaken to pay all costs and expenses of the Meeting.
Other Matters and Shareholder Proposals
The following table sets forth, as of September 30, 1998, each shareholder
who owns more than 5% of any class of the Fund's shares.
- --------------- ------------------------ ---------------------- ----------------
Name and Address of Number of Shares Percent of
Class Beneficial Owner Beneficially Owned* Class
- --------------- ------------------------ ---------------------- ----------------
- --------------- ------------------------ ---------------------- ----------------
- --------------- ------------------------ ---------------------- ----------------
- --------------- ------------------------ ---------------------- ----------------
- --------------- ------------------------ ---------------------- ----------------
*As defined by the Securities and Exchange Commission, a security is
beneficially owned by a person if that person has or shares voting power or
investment power with respect to the security. The Directors and Officers of the
Company as a group owned less than 1% of the shares of each class of the Fund.
Prior to the public offering of the Company's shares, ASISI owned all
of the outstanding shares of the Fund and the other investment portfolios of the
Company. As a result of such public offering, which commenced on August 19,
1998, ASISI may be deemed to have ceased to control the Company.
The Board of Directors intends to bring before the Meeting the Proposal
set forth herein and in the foregoing Notice. The Directors 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
Company, 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 a majority of the
outstanding shares is required to constitute a quorum at the Meeting. 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 the proposal requires the vote of a
"majority of the outstanding voting securities," as defined in the Investment
Company Act, of the Fund, which means the vote of 67% or more of the shares of
the Fund present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or the vote
of more than 50% of the outstanding shares of the Fund, whichever is less.
Shares held by shareholders present in person or represented by proxy
at the Meeting will be counted both for the purposes of determining the presence
of a quorum and for calculating the votes cast on the issues before the Meeting.
An abstention by a shareholder, either by proxy or by vote in person at the
Meeting, has the same effect as a negative vote. Shares held by a broker or
other fiduciary as record owner for the account of the beneficial owner are
counted toward the required quorum and in calculating the votes cast at the
Meeting if the beneficial owner has executed and timely delivered the necessary
instructions for the broker to vote the shares, or if the broker has and
exercises discretionary voting power.
In order to reduce costs, notices to shareholders having more than one
account in the Fund listed under the same Social Security number and zip code
have been combined. However, shareholders will receive a separate proxy card for
each account they own. Therefore, it is important to mark, sign, date, and
return all proxy cards included in your package.
In the event that sufficient votes to approve the 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 Company is not required to hold and will not ordinarily hold annual
shareholders' meetings. The Board of Directors may call special meetings of the
shareholders for action by shareholder vote as required by the Investment
Company Act or the Company's Articles of Incorporation and By-laws.
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 Company 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 Company a reasonable time 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 Directors
Eric C. Freed
Secretary
American Skandia Advisor Funds, Inc.
<PAGE>
LIST OF EXHIBITS
EXHIBIT A Form of New Sub-Advisory Agreement for the Fund
<PAGE>
AMERICAN SKANDIA ADVISOR FUNDS, INC.
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is between American Skandia Investment Services, Incorporated
(the "Investment Manager") and Marsico Capital Management, LLC (the
"Sub-Adviser").
W I T N E S S E T H
WHEREAS, American Skandia Advisor Funds, Inc. (the "Company") is a Maryland
corporation organized with one or more series of shares and is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended (the "ICA"); and
WHEREAS, the Investment Manager and the Sub-Adviser each is an investment
adviser registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); and
WHEREAS, the Board of Directors of the Company (the "Directors") have engaged
the Investment Manager to act as investment manager for the ASAF Marsico Capital
Growth Fund (the "Fund"), one series of the Company, under the terms of a
management agreement, dated August 19, 1998, with the Company (the "Management
Agreement"); and
WHEREAS, the Investment Manager, acting pursuant to the Management Agreement,
wishes to engage the Sub-Adviser, and the Directors have approved the engagement
of the Sub-Adviser, to provide investment advice and other investment services
set forth below.
NOW, THEREFORE, the Investment Manager and the Sub-Adviser agree as follows:
1. Investment Services. The Sub-Adviser will formulate and implement a
continuous investment program for the Fund conforming to the investment
objective, investment policies and restrictions of the Fund as set forth in the
Prospectus and Statement of Additional Information of the Company as in effect
from time to time (together, the "Registration Statement"), the Articles of
Incorporation and By-laws of the Company, and any investment guidelines or other
instructions received by the Sub-Adviser in writing from the Investment Manager
from time to time. Any amendments to the foregoing documents will not be deemed
effective with respect to the Sub-Adviser until the Sub-Adviser's receipt
thereof. The appropriate officers and employees of the Sub-Adviser will be
available to consult with the Investment Manager, the Company and the Directors
at reasonable times and upon reasonable notice concerning the business of the
Company, including valuations of securities which are not registered for public
sale, not traded on any securities market or otherwise may be deemed illiquid
for purposes of the ICA; provided it is understood that the Sub-Adviser is not
responsible for daily pricing of the Fund's assets.
Subject to the supervision and control of the Investment Manager, which
in turn is subject to the supervision and control of the Directors, the
Sub-Adviser in its discretion will determine which issuers and securities will
be purchased, held, sold or exchanged by the Fund or otherwise represented in
the Fund's investment portfolio from time to time and, subject to the provisions
of paragraph 3 of this Agreement, will place orders with and give instructions
to brokers, dealers and others for all such transactions and cause such
transactions to be executed. Custody of the Fund will be maintained by a
custodian bank (the "Custodian") and the Investment Manager will authorize the
Custodian to honor orders and instructions by employees of the Sub-Adviser
designated by the Sub-Adviser to settle transactions in respect of the Fund. No
assets may be withdrawn from the Fund other than for settlement of transactions
on behalf of the Fund except upon the written authorization of appropriate
officers of the Company who shall have been certified as such by proper
authorities of the Company prior to the withdrawal.
The Sub-Adviser will not be responsible for the provision of
administrative, bookkeeping or accounting services to the Fund except as
specifically provided herein, as required by the ICA or the Advisers Act or as
may be necessary for the Sub-Adviser to supply to the Investment Manager, the
Fund or the Fund's shareholders the information required to be provided by the
Sub-Adviser hereunder. Any records maintained hereunder shall be the property of
the Fund and surrendered promptly upon request.
In furnishing the services under this Agreement, the Sub-Adviser will
comply with and use its best efforts to enable the Fund to conform to the
requirements of: (i) the ICA and the regulations promulgated thereunder; (ii)
Subchapter M of the Internal Revenue Code and the regulations promulgated
thereunder; (iii) other applicable provisions of state or federal law; (iv) the
Articles of Incorporation and By-laws of the Company; (v) policies and
determinations of the Company and the Investment Manager provided to the
Sub-Adviser in writing; (vi) the fundamental and non-fundamental investment
policies and restrictions applicable to the Fund, as set out in the Registration
Statement of the Company in effect, or as such investment policies and
restrictions from time to time may be amended by the Fund's shareholders or the
Directors and communicated to the Sub-Adviser in writing; (vii) the Registration
Statement; and (viii) investment guidelines or other instructions received in
writing from the Investment Manager. Notwithstanding the foregoing, the
Sub-Adviser shall have no responsibility to monitor compliance with limitations
or restrictions for which information from the Investment Manager or its
authorized agents is required to enable the Sub-Adviser to monitor compliance
with such limitations or restrictions unless such information is provided to the
Sub-adviser in writing. The Sub-Adviser shall supervise and monitor the
activities of its representatives, personnel and agents in connection with the
investment program of the Fund.
Nothing in this Agreement shall be implied to prevent the Investment
Manager from engaging other sub-advisers to provide investment advice and other
services to the Fund or to series or portfolios of the Company for which the
Sub-Adviser does not provide such services, or to prevent the Investment Manager
from providing such services itself in relation to the Fund or such other series
or portfolios.
The Sub-Adviser shall be responsible for the preparation and filing of
Schedule 13-G and Form 13-F on behalf of the Fund. The Sub-Adviser shall not be
responsible for the preparation or filing of any other reports required of the
Fund by any governmental or regulatory agency, except as expressly agreed in
writing.
2. Investment Advisory Facilities. The Sub-Adviser, at its expense, will furnish
all necessary investment facilities, including salaries of personnel, required
for it to execute its duties hereunder.
3. Execution of Fund Transactions. In connection with the investment and
reinvestment of the assets of the Fund, the Sub-Adviser is responsible for the
selection of broker-dealers to execute purchase and sale transactions for the
Fund in conformity with the policy regarding brokerage as set forth in the
Registration Statement, or as the Directors may determine from time to time, as
well as the negotiation of brokerage commission rates with such executing
broker-dealers. Generally, the Sub-Adviser's primary consideration in placing
Fund investment transactions with broker-dealers for execution will be to
obtain, and maintain the availability of, best execution at the best available
price.
Consistent with this policy, the Sub-Adviser, in selecting
broker-dealers and negotiating brokerage commission rates, will take all
relevant factors into consideration, including, but not limited to: the best
price available; the reliability, integrity and financial condition of the
broker-dealer; the size of and difficulty in executing the order; and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Subject to such policies and procedures as
the Directors may determine, the Sub-Adviser shall have discretion to effect
investment transactions for the Fund through broker-dealers (including, to the
extent permissible under applicable law, broker-dealers affiliated with the
Sub-Adviser) qualified to obtain best execution of such transactions who provide
brokerage and/or research services, as such services are defined in section
28(e) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
to cause the Fund to pay any such broker-dealers an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker-dealer would have charged for effecting that
transaction, if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage or research
services provided by such broker-dealer, viewed in terms of either that
particular investment transaction or the Sub-Adviser's overall responsibilities
with respect to the Fund and other accounts as to which the Sub-Adviser
exercises investment discretion (as such term is defined in section 3(a)(35) of
the 1934 Act). Allocation of orders placed by the Sub-Adviser on behalf of the
Fund to such broker-dealers shall be in such amounts and proportions as the
Sub-Adviser shall determine in good faith in conformity with its
responsibilities under applicable laws, rules and regulations. The Sub-Adviser
will submit reports on such allocations to the Investment Manager regularly as
requested by the Investment Manager, in such form as may be mutually agreed to
by the parties hereto, indicating the broker-dealers to whom such allocations
have been made and the basis therefor.
Subject to the foregoing provisions of this paragraph 3, the
Sub-Adviser may also consider sales of shares of the Fund, or may consider
recommendations of the Investment Manager that takes such sales into account, as
factors in the selection of broker-dealers to effect the Fund's investment
transactions. Notwithstanding the above, nothing shall require the Sub-Adviser
to use a broker-dealer which provides research services or to use a particular
broker-dealer which the Investment Manager has recommended.
4. Reports by the Sub-Adviser. The Sub-Adviser shall furnish the Investment
Manager monthly, quarterly and annual reports, in such form as may be mutually
agreed to by the parties hereto, concerning transactions and performance of the
Fund, including information required in the Registration Statement or
information necessary for the Investment Manager to review the Fund or discuss
the management of it. The Sub-Adviser shall permit the books and records
maintained with respect to the Fund to be inspected and audited by the Company,
the Investment Manager or their respective agents at all reasonable times during
normal business hours upon reasonable notice. The Sub-Adviser shall immediately
notify both the Investment Manager and the Company of any legal process served
upon it in connection with its activities hereunder, including any legal process
served upon it on behalf of the Investment Manager, the Fund or the Company. The
Sub-Adviser shall promptly notify the Investment Manager of any changes in any
information regarding the Sub-Adviser or the investment program for the Fund as
described in the Registration Statement.
5. Compensation of the Sub-Adviser. The amount of the compensation to the
Sub-Adviser is computed at an annual rate. The fee shall be payable monthly in
arrears, based on the average daily net assets of the Fund for each month, at
the annual rate set forth in Exhibit A to this Agreement.
In computing the fee to be paid to the Sub-Adviser, the net asset value
of the Fund shall be valued as set forth in the Registration Statement. If this
Agreement is terminated, the payment described herein shall be prorated to the
date of termination.
The Investment Manager and the Sub-Adviser shall not be considered as
partners or participants in a joint venture. The Sub-Adviser will pay its own
expenses for the services to be provided pursuant to this Agreement and will not
be obligated to pay any expenses of the Investment Manager, the Fund or the
Company. Except as otherwise specifically provided herein, the Investment
Manager, the Fund and the Company will not be obligated to pay any expenses of
the Sub-Adviser.
6. Delivery of Documents to the Sub-Adviser. The Investment Manager has
furnished the Sub-Adviser with true, correct and complete copies of each of the
following documents:
(a) The Articles of Incorporation of the Company, as in effect on the date
hereof;
(b) The By-laws of the Company, as in effect on the date hereof;
(c) The resolutions of the Directors approving the engagement of the
Sub-Adviser as portfolio manager of the Fund and approving the form of
this Agreement;
(d) The resolutions of the Directors selecting the Investment Manager as
investment manager to the Fund and approving the form of the
Management Agreement;
(e) The Management Agreement;
(f) The Code of Ethics of the Company and of the Investment Manager, as in
effect on the date hereof;
(g) The most recent Registration Statement;
(h) The Investment Manager's Form ADV as filed with the Securities and
Exchange Commission as of the date hereof; and
(i) A list of companies the securities of which are not to be bought or
sold for the Fund.
The Investment Manager will furnish the Sub-Adviser from time to time
with copies, properly certified or otherwise authenticated, of all amendments of
or supplements to the foregoing, if any. Such amendments or supplements as to
items (a) through (h) above will be provided within 30 days of the time such
materials become available to the Investment Manager. Such amendments or
supplements as to item (i) above will be provided not later than the end of the
business day next following the date such amendments or supplements become known
to the Investment Manager. Any amendments or supplements to the foregoing will
not be deemed effective with respect to the Sub-Adviser until the Sub-Adviser's
receipt thereof. The Investment Manager will provide such additional information
as the Sub-Adviser may reasonably request in connection with the performance of
its duties hereunder.
7. Delivery of Documents to the Investment Manager. The Sub-Adviser has
furnished the Investment Manager with true, correct and complete copies of each
of the following documents:
(a) The Sub-Adviser's Form ADV as filed with the Securities and Exchange
Commission as of the date hereof;
(b) The Sub-Adviser's most recent balance sheet;
(c) Separate lists of persons who the Sub-Adviser wishes to have
authorized to give written and/or oral instructions to Custodians of
Company assets for the Fund; and
(d) The Code of Ethics of the Sub-Adviser, as in effect on the date
hereof.
The Sub-Adviser will furnish the Investment Manager from time to time
with copies, properly certified or otherwise authenticated, of all amendments of
or supplements to the foregoing, if any. Such amendments or supplements will be
provided within 30 days of the time such materials become available to the
Sub-Adviser. Any amendments or supplements to the foregoing will not be deemed
effective with respect to the Investment Manager until the Investment Manager's
receipt thereof. The Sub-Adviser will provide additional information as the
Investment Manager may reasonably request in connection with the Sub-Adviser's
performance of its duties under this Agreement.
8. Confidential Treatment. The parties hereto understand that any information or
recommendation supplied by the Sub-Adviser in connection with the performance of
its obligations hereunder is to be regarded as confidential and for use only by
the Investment Manager, the Company or such persons the Investment Manager may
designate in connection with the Fund. The parties also understand that any
information supplied to the Sub-Adviser in connection with the performance of
its obligations hereunder, particularly, but not limited to, any list of
securities which may not be bought or sold for the Fund, is to be regarded as
confidential and for use only by the Sub-Adviser in connection with its
obligation to provide investment advice and other services to the Fund.
9. Representations of the Parties. Each party hereto hereby further represents
and warrants to the other that: (i) it is registered as an investment adviser
under the Advisers Act and is registered or licensed as an investment adviser
under the laws of all jurisdictions in which its activities require it to be so
registered or licensed; and (ii) it will use its reasonable best efforts to
maintain each such registration or license in effect at all times during the
term of this Agreement; and (iii) it will promptly notify the other if it ceases
to be so registered, if its registration is suspended for any reason, or if it
is notified by any regulatory organization or court of competent jurisdiction
that it should show cause why its registration should not be suspended or
terminated; and (iv) it is duly authorized to enter into this Agreement and to
perform its obligations hereunder.
The Sub-Adviser further represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1(b) of the ICA. The Sub-Adviser shall be
subject to such Code of Ethics, and shall not be subject to any other Code of
Ethics, including the Investment Manager's Code of Ethics, unless specifically
adopted by the Sub-Adviser. The Investment Manager further represents and
warrants to the Sub-Adviser that (i) the appointment of the Sub-Adviser by the
Investment Manager has been duly authorized and (ii) it has acted and will
continue to act in connection with the transactions contemplated hereby, and the
transactions contemplated hereby are, in conformity with the ICA, the Company's
governing documents and other applicable law.
10. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard for its obligations hereunder, the Sub-Adviser
shall not be liable to the Company, the Fund, the Fund's shareholders or the
Investment Manager for any act or omission resulting in any loss suffered by the
Company, the Fund, the Fund's shareholders or the Investment Manager in
connection with any service to be provided herein. The Federal laws impose
responsibilities under certain circumstances on persons who act in good faith,
and therefore, nothing herein shall in any way constitute a waiver or limitation
of any rights which the Company, the Fund or the Investment Manager may have
under applicable law.
11. Other Activities of the Sub-Adviser. The Investment Manager agrees that the
Sub-Adviser and any of its partners or employees, and persons affiliated with
the Sub-Adviser or with any such partner or employee, may render investment
management or advisory services to other investors and institutions, and that
such investors and institutions may own, purchase or sell, securities or other
interests in property that are the same as, similar to, or different from those
which are selected for purchase, holding or sale for the Fund. The Investment
Manager further acknowledges that the Sub-Adviser shall be in all respects free
to take action with respect to investments in securities or other interests in
property that are the same as, similar to, or different from those selected for
purchase, holding or sale for the Fund. The Investment Manager understands that
the Sub-Adviser shall not favor or disfavor any of the Sub-Adviser's clients or
class of clients in the allocation of investment opportunities, so that to the
extent practical, such opportunities will be allocated among the Sub-Adviser's
clients over a period of time on a fair and equitable basis. Nothing in this
Agreement shall impose upon the Sub-Adviser any obligation (i) to purchase or
sell, or recommend for purchase or sale, for the Fund any security which the
Sub-Adviser, its partners, affiliates or employees may purchase or sell for the
Sub-Adviser or such partner's, affiliate's or employee's own accounts or for the
account of any other client of the Sub-Adviser, advisory or otherwise, or (ii)
to abstain from the purchase or sale of any security for the Sub-Adviser's other
clients, advisory or otherwise, which the Investment Manager has placed on the
list provided pursuant to paragraph 6(i) of this Agreement.
12. Continuance and Termination. This Agreement shall remain in full force and
effect for one year from the date hereof, and is renewable annually thereafter
by specific approval of the Directors or by vote of a majority of the
outstanding voting securities of the Fund. Any such renewal shall be approved by
the vote of a majority of the Directors who are not interested persons under the
ICA, cast in person at a meeting called for the purpose of voting on such
renewal. This Agreement may be terminated without penalty at any time by the
Investment Manager or the Sub-Adviser upon 60 days written notice, and will
automatically terminate in the event of (i) its "assignment" by either party to
this Agreement, as such term is defined in the ICA, subject to such exemptions
as may be granted by the Securities and Exchange Commission by rule, regulation
or order, or (ii) upon termination of the Management Agreement, provided the
Sub-Adviser has received prior written notice thereof.
13. Notification. The Sub-Adviser will notify the Investment Manager within a
reasonable time of any change in the personnel of the Sub-Adviser with
responsibility for making investment decisions in relation to the Fund (the
"Portfolio Manager(s)") or who have been authorized to give instructions to the
Custodian. The Sub-adviser shall be responsible for reasonable out-of-pocket
costs and expenses incurred by the Investment Manager, the Fund or the Company
to amend or supplement the Company's prospectus to reflect a change in Portfolio
Manager(s) or otherwise to comply with the ICA, the Securities Act of 1933, as
amended (the "1933 Act") or any other applicable statute, law, rule or
regulation, as a result of such change; provided, however, that the Sub-Adviser
shall not be responsible for such costs and expenses where the change in
Portfolio Manager(s) reflects the termination of employment of the Portfolio
Manager(s) with the Sub-Adviser and its affiliates or is the result of a request
by the Investment Manager or is due to other circumstances beyond the
Sub-Adviser's control.
Any notice, instruction or other communication required or contemplated
by this Agreement shall be in writing. All such communications shall be
addressed to the recipient at the address set forth below, provided that either
party may, by notice, designate a different recipient and/or address for such
party.
Investment Manager: American Skandia Investment Services, Incorporated
One Corporate Drive
Shelton, Connecticut 06484
Attention: John Birch
Vice President & Chief Operating Officer
Sub-Adviser: Marsico Capital Management, LLC
1200 17th Street
Suite 1300
Denver, Colorado 80202
Attention: Barbara Japha, Esq.
Company: American Skandia Advisor Funds, Inc.
One Corporate Drive
Shelton, Connecticut 06484
Attention: Eric C. Freed, Esq.
14. Indemnification. The Sub-Adviser agrees to indemnify and hold harmless the
Investment Manager, any affiliated person within the meaning of Section 2(a)(3)
of the ICA ("affiliated person") of the Investment Manager and each person, if
any who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Investment Manager, against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses), to which the Investment Manager or such affiliated person or
controlling person of the Investment Manager may become subject under the 1933
Act, the ICA, the Advisers Act, under any other statute, law, rule or regulation
at common law or otherwise, arising out of the Sub-Adviser's responsibilities
hereunder (1) to the extent of and as a result of the willful misconduct, bad
faith, or gross negligence by the Sub-Adviser, any of the Sub-Adviser's
employees or representatives or any affiliate of or any person acting on behalf
of the Sub-Adviser, or (2) as a result of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including
any amendment thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, if such a statement or
omission was made in reliance upon and in conformity with written information
furnished by the Sub-Adviser to the Investment Manager, the Fund, the Company or
any affiliated person of the Investment Manager, the Fund or the Company or upon
verbal information confirmed by the Sub-Adviser in writing, or (3) to the extent
of, and as a result of, the failure of the Sub-Adviser to execute, or cause to
be executed, portfolio investment transactions according to the requirements of
the ICA; provided, however, that in no case is the Sub-Adviser's indemnity in
favor of the Investment Manager or any affiliated person or controlling person
of the Investment Manager deemed to protect such person against any liability to
which any such person would otherwise be subject by reason of willful
misconduct, bad faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under this
Agreement.
The Investment Manager agrees to indemnify and hold harmless the
Sub-Adviser, any affiliated person of the Sub-Adviser and each controlling
person of the Sub-Adviser, if any, against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Sub-Adviser or such affiliated person or controlling person of the
Sub-Adviser may become subject under the 1933 Act, the ICA, the Advisers Act,
under any other statute, law, rule or regulation, at common law or otherwise,
arising out of the Investment Manager's responsibilities as investment manager
of the Fund (1) to the extent of and as a result of the willful misconduct, bad
faith, or gross negligence by the Investment Manager, any of the Investment
Manager's employees or representatives or any affiliate of or any person acting
on behalf of the Investment Manager, or (2) as a result of any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including any amendment thereof or any supplement thereto or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, if
such a statement or omission was made other than in reliance upon and in
conformity with written information furnished by the Sub-Adviser, or any
affiliated person of the Sub-Adviser or other than upon verbal information
confirmed by the Sub-Adviser in writing; provided, however, that in no case is
the Investment Manager's indemnity in favor of the Sub-Adviser or any affiliated
person or controlling person of the Sub-Adviser deemed to protect such person
against any liability to which any such person would otherwise be subject by
reason of willful misconduct, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement. It is agreed that the Investment Manager's
indemnification obligations under this Section 14 will extend to expenses and
costs (including reasonable attorneys fees) incurred by the Sub-Adviser as a
result of any litigation brought by the Investment Manager alleging the
Sub-Adviser's failure to perform its obligations and duties in the manner
required under this Agreement unless judgment is rendered for the Investment
Manager.
15. Conflict of Laws. The provisions of this Agreement shall be subject to all
applicable statutes, laws, rules and regulations, including, without limitation,
the applicable provisions of the ICA and rules and regulations promulgated
thereunder. To the extent that any provision contained herein conflicts with any
such applicable provision of law or regulation, the latter shall control. The
terms and provisions of this Agreement shall be interpreted and defined in a
manner consistent with the provisions and definitions of the ICA. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall continue in
full force and effect and shall not be affected by such invalidity.
16. Amendments, Waivers, etc. Provisions of this Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. This Agreement (including Exhibit A hereto) may be amended at any
time by written mutual consent of the parties, subject to the requirements of
the ICA and rules and regulations promulgated and orders granted thereunder.
17. Governing State Law. This Agreement is made under, and shall be governed by
and construed in accordance with, the laws of the State of Connecticut.
18. Severability. Each provision of this Agreement is intended to be severable.
If any provision of this Agreement is held to be illegal or made invalid by
court decision, statute, rule or otherwise, such illegality or invalidity will
not affect the validity or enforceability of the remainder of this Agreement.
The effective date of this agreement is February ___, 1999.
FOR THE INVESTMENT MANAGER: FOR THE SUB-ADVISER:
- ----------------------------------- -----------------------------------
John Birch
Vice President & Chief Operating Officer
Date: ____________________________ Date: ____________________________
<PAGE>
American Skandia Advisor Funds, Inc.
ASAF Marsico Capital Growth Fund
Sub-Advisory Agreement
EXHIBIT A
An annual rate of .45% of the average daily net assets of the Fund.
<PAGE>
AMERICAN SKANDIA ADVISOR FUNDS, INC,
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS OF
THE ASAF MARSICO CAPITAL GROWTH FUND
TO BE HELD ON FEBRUARY 5, 1999
The undersigned hereby appoints Maureen Gulick and Deirdre Burke and
each of them as the proxy or proxies of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all shares of beneficial
interest of the above stated Fund of American Skandia Advisor Funds, Inc. (or
"Company") that the undersigned is entitled to vote at a Special Meeting of the
Shareholders of the ASAF Marsico Capital Growth Fund to be held at 10:00 a.m.,
Eastern Time, on February 5, 1999 at the offices of the Company at One Corporate
Drive, Shelton, Connecticut and at any adjournments thereof, upon the matters
described in the accompanying Proxy Statement and upon any other business that
may properly come before the meeting or any adjournment thereof. Said proxies
are directed to vote or to refrain from voting as checked on the reverse side.
If any other matters are properly presented to the meeting for action, it is
intended that the proxies will vote in accordance with their judgment.
PLEASE SIGN BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
The undersigned acknowledges receipt with this proxy of a copy of the
Combined Notice of Special Meeting of Shareholders and the Proxy Statement of
the Company. If a contract is jointly held, each contract owner named should
sign. 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."
CONTRACT NO:
UNITS:
CONTROL NO:
<TABLE>
<CAPTION>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
- -----------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- -----------------------------------------------------------------------------------------------------------------------------------
AMERICAN SKANDIA ADVISOR FUNDS, INC. - ASAF MARSICO CAPITAL GROWTH FUND
Vote on Proposal
For Against Abstain
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THE BOARD OF DIRECTORS OF THE COMPANY I. TO APPROVE A NEW SUB-ADVISORY [] [] []
RECOMMENDS VOTING FOR THE FOLLOWING AGREEMENT BETWEEN AMERICAN SKANDIA
PROPOSALS: INVESTMENT SERVICES, INCORPORATED AND
MARSICO CAPITAL MANAGEMENT, LLC REGARDING THE
THE SHARES REPRESENTED HEREBY WILL BE VOTED INVESTMENT ADVICE TO THE ASAF MARSICO CAPITAL
AS INDICATED OR FOR THE PROPOSALS IF NO GROWTH FUND.
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CHOICE IS INDICATED.
THIS PROXY IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY.
Please be sure to sign and date this Proxy
_________________________ Date:___________ _________________________ Date: ____________
Signature [PLEASE SIGN WITHIN BOX] Signature [Co-owner]
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