Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Telephone (215) 564-8000
Fax (215) 564-8120
[DATE]
Board of Trustees
American Skandia Trust
One Corporate Drive
Shelton, CT 06484
Re: Plan of Reorganization, dated as of the ___ day of ________, 2000 (the "Plan"), made by
American Skandia Trust (the "Trust") on behalf of, inter alia, the AST Alger All-Cap Growth
Portfolio (the "Acquiring Fund") and the AST Alger Mid-Cap Growth Portfolio (the "Acquired
Fund")
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Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax consequences of the reorganization of the Acquired
Fund, which consists of: (i) the acquisition, by the Acquiring Fund, of substantially all of the property, assets and
goodwill of the Acquired Fund, in exchange solely for full and fractional shares of beneficial interest, par value $0.001
per share, of the Acquiring Fund (the "Acquiring Fund Shares") and the assumption of the Acquired Fund's liabilities;
(ii) the distribution by the Acquired Fund of the Acquiring Fund Shares to the shareholders of Acquired Fund in complete
liquidation of the Acquired Fund; and (iii) the dissolution of the Acquired Fund as soon as is practicable after the
closing date of the Reorganization (the "Reorganization"), all upon and subject to the terms and conditions of the Plan.
In rendering our opinion, we have reviewed and relied upon: (a) the Plan, dated ________ ___, 2000, made by the Trust)
on behalf of, inter alia, Acquiring Fund and the Acquired; (b) the proxy materials provided to shareholders of the
Acquired Fund in connection with the Special Meeting of Shareholders of the Acquired Fund held on [DATE]; (c) certain
representations concerning the Reorganization made to us as of [DATE], by the Acquiring Fund and the Acquired Fund in a
letter dated [DATE] (the "Representation Letter"); (d) all other documents, financial and other reports and corporate
minutes which we deemed relevant or appropriate; and (e) such statutes, regulations, rulings and decisions as we deemed
material to the rendition of this opinion. All terms used herein, unless otherwise defined, are used as defined in the
Plan.
For purposes of this opinion, we have assumed that the Acquired Fund, on the date of the Reorganization, satisfies, and
following the Reorganization, the Acquiring Fund will continue to satisfy, the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated investment company.
Based on the foregoing, and provided that the Reorganization is carried out in accordance with the applicable laws of
the State of Delaware, the terms of the Plan, and statements in the Representation Letter, it is our opinion that:
1. The acquisition by the Acquiring Fund of substantially all of the assets of the Acquired Fund
subject to all of the liabilities of the Acquired Fund as provided for in the Plan in exchange for the Acquiring Fund
Shares, followed by the distribution by the Acquired Fund to its shareholders of the Acquiring Fund Shares in complete
liquidation of the Acquired Fund, will qualify as a reorganization within the meaning of Section 368(a)(1) of the Code,
and the Acquired Fund and the Acquiring Fund will each be a "party to the reorganization" within the meaning of Section
368(b) of the Code.
2. No gain or loss will be recognized by the Acquired Fund upon the transfer of substantially all of its assets to
the Acquiring Fund subject to all of the liabilities of the Acquired Fund in exchange solely for the Acquiring Fund
Shares pursuant to Section 361(a) and Section 357(a) of the Code.
3. No gain or loss will be recognized by the Acquiring Fund upon the receipt by it of substantially all of the
assets of the Acquired Fund subject to all of the liabilities of the Acquired Fund in exchange solely for the Acquiring
Fund Shares pursuant to Section 1032(a) of the Code.
4. No gain or loss will be recognized by the Acquired Fund upon the distribution of the Acquiring Fund Shares to its
shareholders pursuant to the plan of liquidation of the Acquired Fund (in pursuance of the Plan) under Section 361(c)(1)
of the Code.
5. The basis of the assets of the Acquired Fund received by the Acquiring Fund will be the same as the basis of such
assets to the Acquired Fund immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding period of the assets of the Acquired Fund received by the Acquiring Fund will include the period
during which such assets were held by the Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the Acquired Fund upon the exchange of their shares in
the Acquired Fund ("Acquired Fund Shares") for the Acquiring Fund Shares (including fractional shares to which they may
be entitled), pursuant to Section 354(a) of the Code.
8. The basis of the Acquiring Fund Shares received by the shareholders of the Acquired Fund (including fractional
shares to which they may be entitled) will be the same as the basis of the Acquired Fund Shares exchanged therefor
pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by the shareholders of the Acquired Fund (including
fractional shares to which they may be entitled) will include the holding period of the Acquired Fund Shares surrendered
in exchange therefor, provided that the Acquired Fund Shares were held as a capital asset on the date of the
Reorganization, pursuant to Section 1223(1) of the Code.
10. The Acquiring Fund will succeed to and take into account as of the date of the transfer (as defined in Section
1.381(b)-1(b) of the regulations issued by the United States Treasury ("Treasury Regulations")) the items of the Acquired
Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382,
383 and 384 of the Code and the Treasury Regulations thereunder.
Our opinion is based upon the Code, the applicable Treasury Regulations promulgated thereunder, the present positions
of the Internal Revenue Service (the "Service") as set forth in published revenue rulings and revenue procedures, present
administrative positions of the Service, and existing judicial decisions, all of which are subject to change either
prospectively or retroactively. We do not undertake to make any continuing analysis of the facts or relevant law
following the date of the Reorganization.
Our opinion is conditioned upon the performance by the Acquiring Fund and the Acquired Fund of their undertakings in
the Plan and the Representation Letter.
Our opinion is limited to the transactions incident to the Reorganization described herein, and no opinion is rendered
with respect to (i) any other transaction, including, without limitation, the redemption of shares of the Alger American
MidCap Growth Portfolio of the Alger American Fund and the purchase of shares of the Acquired Fund with the proceeds of
such redemption (collectively the "Alger American Transaction"), or (ii) the effect, if any, of the Reorganization
(and/or the transactions incident thereto) on any other transaction, including, without limitation, the Alger American
Transaction. In addition, no opinion is rendered regarding (iii) whether either the Acquired Fund or the Acquiring Fund
qualifies as a regulated investment company for federal income tax purposes, (iv) whether either the Acquired Fund or the
Acquiring Fund satisfies the diversification requirements of Section 817(h) of the Code, and (v) whether variable annuity
contract owners and variable life insurance policy holders who have allocated their assets to the Acquired Fund possess
sufficient indicia of control over the investment to be regarded as the owner of the assets of the Acquired Fund for
federal income tax purposes under the principles of Rev. Rul. 81-225, 1981-2 C.B. 12.
This opinion is being rendered to the Acquiring Fund and the Acquired Fund, and may be relied upon only by such funds
and the shareholders of each.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By:
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