ADVANCED SERIES TRUST AST New Discovery Asset Allocation Portfolio SUBADVISORY AGREEMENT
EXECUTION COPY
67958 2-4
ADVANCED
SERIES TRUST
AST New Discovery Asset Allocation Portfolio
SUBADVISORY AGREEMENT
Agreement
made as of this ______ day of
March, 2012
between Prudential Investments LLC (PI), a New York limited liability company and AST Investment
Services, Inc. (formerly American Skandia Investment Services, Inc.) (AST), a Maryland corporation (together, the Co-Managers),
and XXXXXXX Partners, LLC, a Delaware
limited liability company (XXXXXXX
or the Subadviser),
WHEREAS,
the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series
Trust (formerly American Skandia Trust), a Massachusetts business trust (the Trust) and a diversified, open-end management
investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), pursuant to which PI and AST
act as Co-Managers of the Trust; and
WHEREAS, the Co-Managers, acting pursuant to the Management Agreement, desire to retain
the Subadviser to provide investment advisory services to the Trust and one or more of its series as specified in Schedule A
hereto (individually and collectively, with the Trust, referred to herein as the Trust) and to manage such portion of the Trust as
the Co-Managers shall from time to time direct, and the Subadviser is willing to render such investment advisory services; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Co-Managers and the Board of Trustees of the Trust (the Board), the Subadviser shall manage such portion of the Trust’s portfolio as delegated to the Subadviser by the Co-Managers, including the purchase, retention and disposition thereof, in accordance with the Trust’s investment objectives, policies and restrictions as stated in its then current prospectus and statement of additional information (such Prospectus and Statement of Additional Information as currently in effect and as amended or supplemented from time to time, being herein called the “Prospectus”), and subject to the following understandings:
(i) The
Subadviser shall provide supervision of such portion of the Trust's investments as the Co-Managers shall direct, and shall
determine from time to time what investments and securities will be purchased, retained, sold or loaned by the Trust, and what
portion of the assets will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations
under this Agreement, the Subadviser shall act in conformity with the copies of the Amended and Restated Declaration of Trust of
the Trust, the By-laws of the Trust, the Prospectus of the Trust, and the Trust’s policies
and procedures as adopted
by the Board and provided to the Subadviser by
the Co-Managers, including the Trust’s valuation
procedures as provided to it by the Co-Managers (collectively, the
Trust Documents) and with the instructions and directions of the Co-Managers and of the Board of Trustees of the Trust, co-operate
with the Co-Managers' (or their designees') personnel responsible for monitoring the Trust’s compliance and will conform to,
and comply with, the requirements of the 1940 Act, the Internal Revenue Code of 1986, as amended, and all other applicable federal
and state laws and regulations. In connection therewith, the Subadviser shall, among other things, prepare and file such reports
as are, or may in the future be, required by the Securities and Exchange Commission (the Commission). The Co-Managers shall
provide Subadviser timely with copies of any updated Trust Documents.
(iii) The
Subadviser shall determine the securities, currencies,
and futures contracts to be purchased or sold by such
portion of the Trust's portfolio, as applicable. The
Subadviser may place orders with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to any broker or dealer affiliated with the Co-Managers
or the Subadviser) to carry out the policy with respect to brokerage as set forth in the
Trust's Prospectus or as the Board of Trustees may direct in writing from time to time. In providing the Trust with investment
supervision, it is recognized that the Subadviser will give primary consideration to securing the most favorable price and
efficient execution. Within the framework of this policy, the Subadviser may consider the financial responsibility,
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 the Subadviser’s other clients may be a party. The
Co-Managers (or Subadviser) to the Trust each shall have discretion to effect investment transactions for the Trust through
broker-dealers (including, to the extent legally permissible, broker-dealers affiliated with the Subadviser(s)) 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 Trust to pay any such
broker-dealers an amount of commission for effecting a portfolio transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the brokerage or research services provided by such
broker-dealer, viewed in light of either that particular investment transaction or the overall responsibilities of the Co-Managers
(or the Subadviser) with respect to the Trust and other accounts as to which they or it may exercise investment discretion (as
such term is defined in Section 3(a)(35) of the 1934 Act), are reasonable in relation to the amount of commission.
On
occasions when the Subadviser deems the purchase or sale of a security or futures contract to be in the best interest of the Trust
as well as other clients of the Subadviser, the Subadviser, to the extent permitted by applicable laws and regulations, may, but
shall be under no obligation to, aggregate the securities or futures contracts to be sold or purchased. 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 Subadviser in the manner the Subadviser considers to be the most equitable and consistent with its fiduciary obligations to
the Trust and to such other clients.
(iv) The Subadviser shall maintain all books and records with respect to the Trust’s
portfolio transactions effected by it as required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f)
of Rule 31a-1 under the 1940 Act, and shall render to the Trust’s Board of Trustees such periodic and special reports as
the Trustees may reasonably request. The Subadviser shall make reasonably available its employees and officers for consultation
with any of the Trustees or officers or employees of the Trust with respect to any matter discussed herein, including, without
limitation, the valuation of the Trust’s securities.
(v) The Subadviser or an affiliate shall provide the Trust's
Custodian on each business day with information relating to all transactions concerning the portion of the Trust’s assets it
manages, and shall provide the Co-Managers with such information upon request of the Co-Managers.
(vi) The investment
management services provided by the Subadviser hereunder are not to be deemed exclusive, and the Subadviser shall be free to
render similar services to others. Conversely, the Subadviser and Co-Managers understand and agree that if the Co-Managers manage
the Trust in a “manager-of-managers” style, the Co-Managers will, among other things, (i) continually evaluate the
performance of the Subadviser through quantitative and qualitative analysis and consultations with the Subadviser, (ii)
periodically make recommendations to the Trust’s Board as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated, and (iii) periodically report to the Trust's Board regarding the results of its evaluation
and monitoring functions. The Subadviser recognizes that its services may be terminated or modified pursuant to this process.
(vii) The Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-10, Rule 10f-3, Rule
12d3-1 and Rule 17e-1 under the 1940 Act, and the Subadviser hereby agrees that it shall not consult with any other subadviser to
the Trust with respect to transactions in securities for the Trust’s portfolio or any other transactions of Trust assets.
(b) The Subadviser shall authorize and permit any of its directors, officers and employees who may be elected as Trustees or
officers of the Trust to serve in the capacities in which they are elected. Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any of such directors, officers or employees.
(c) The Subadviser shall
keep the Trust’s books and records required to be maintained by the Subadviser pursuant to paragraph 1(a) hereof and shall
timely furnish to the Co-Managers all information relating to the Subadviser’s services hereunder needed by the Co-Managers
to keep the other books and records of the Trust required by Rule 31a-1 under the 1940 Act or any successor regulation. The
Subadviser agrees that all records which it maintains for the Trust are the property of the Trust, and the Subadviser will
surrender promptly to the Trust any of such records upon the Trust’s request, provided, however, that the Subadviser may
retain a copy of such records. The Subadviser further agrees to preserve for the periods prescribed by Rule 31a-2 of the
Commission under the 1940 Act or any successor regulation any such records as are required to be maintained by it pursuant to
paragraph 1(a) hereof.
(d) In connection with its duties under this Agreement, the Subadviser agrees to maintain
adequate compliance procedures to ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940, as amended, and
other applicable state and federal regulations.
(e) The Subadviser shall furnish to the Co-Managers copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) the maintenance of compliance procedures
pursuant to paragraph 1(d) hereof as the Manager may reasonably request.
(f) The Subadviser shall be responsible for the voting of all shareholder proxies with respect to the investments and securities held in the Trust’s portfolio, subject to such reasonable reporting and other requirements as shall be established by the Co-Managers. The Co-Managers and the Subadviser acknowledge that, as of the date hereof, a third-party vendor that has been retained by the Trust and certain other registered investment companies advised by PI, AST, or their affiliates shall be responsible for the administration of securities class action claims for securities purchased by the Subadviser on behalf of the Trust. The Co-Managers shall notify the Subadviser in the event of any material change to the process for administering class action claims on behalf of the Trust. Should the Subadviser receive class action notices or related materials for the Trust involving securities purchased by the Subadviser on behalf of the Trust, the Subadviser shall use commercially reasonable efforts to transmit copies of such notices or materials to the Co-Managers’ current Custodian.
(g) Upon
reasonable request from the Co-Managers, the Subadviser (through a qualified person) will assist the valuation committee of the
Trust or the Co-Managers in valuing securities of the Trust as may be required from time to time, including making available
information of which the Subadviser has knowledge related to the securities being valued.
2. The Co-Managers shall continue to have responsibility for all services to be provided to the
Trust pursuant to the Management Agreement and, as more particularly discussed above, shall oversee and review the Subadviser’s
performance of its duties under this Agreement. The Co-Managers shall provide (or cause the Trust’s custodian to provide)
timely information to the Subadviser regarding such matters as the composition of assets in the portion of the Trust managed by
the Subadviser, cash requirements and cash available for investment in such portion of the Trust, and all other information as may
be reasonably necessary for the Subadviser to perform its duties hereunder (including any excerpts of minutes of meetings of the
Board of Trustees of the Trust that affect the duties of the Subadviser).
3. For the services provided pursuant to this
Agreement, the Co-Managers shall pay the Subadviser as full compensation therefor, a fee equal to the percentage of the Trust’s
average daily net assets of the portion of the Trust managed by the Subadviser as described in the attached Schedule A. Liability
for payment of compensation by the Co-Managers to the Subadviser under this Agreement is contingent upon the Co-Managers’
receipt of payment from the Trust for management services described under the Management Agreement between the Fund and the
Co-Managers. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to by the
Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.
4. The Subadviser
shall not be liable for any error of judgment or for any loss suffered by the Trust or the Co-Managers in connection with the
matters to which this Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the
Subadviser’s part in the performance of its duties or from its reckless disregard of its obligations and duties under this
Agreement, provided, however, that nothing in this Agreement shall be deemed to waive any rights the Co-Managers or the Trust may
have against the Subadviser under federal or state securities laws. The Co-Managers shall indemnify the Subadviser, its affiliated
persons, its officers, directors and employees, for any liability and expenses, including attorneys’ fees, which may be
sustained as a result of the Co-Managers' willful misfeasance, bad faith, gross negligence, reckless disregard of its duties
hereunder or violation of applicable law, including, without limitation, the 1940 Act and federal and state securities laws. The
Subadviser shall indemnify the Co-Managers, their affiliated persons, their officers, directors and employees, for any liability
and expenses, including attorneys’ fees, which may be sustained as a result of the Subadviser’s willful misfeasance, bad
faith, gross negligence, or reckless disregard of its duties hereunder or violation of applicable law, including, without
limitation, the 1940 Act and federal and state securities laws.
5. This Agreement shall continue in effect 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 by the Trust at any time, without the payment of any penalty, by the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities (as defined in the 0000 Xxx) of the Fund, or by the Co-Managers or the Subadviser 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 0000 Xxx) or upon the termination of the Management Agreement. The Subadviser agrees that it will promptly notify the Trust and the Co-Managers of the occurrence of any event that would result in the assignment (as defined in the 0000 Xxx) of this Agreement, including, but not limited to, a change of control (as defined in the 0000 Xxx) of the Subadviser.
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, (1) to the Co-Managers at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX
00000-0000, Attention: Secretary (for PI) and Xxx Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx, 00000, Attention: Secretary (for AST); (2) to
the Trust at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; or (3) to the
Subadviser at 0000 Xxxxxxxxx Xxxxxx XX, Xxxxx
0000, Xxxxxxx, XX
00000, Attention: Chief Compliance Officer.
6. Nothing in this Agreement shall limit or restrict the right of any of the Subadviser’s directors, officers or employees who may also be a Trustee, officer or employee of the Trust 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 a dissimilar nature, nor limit or restrict the Subadviser’s right to engage in any other business or to render services of any kind to any other corporation, firm, individual or association.
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7. During the term of this Agreement, the Co-Managers agree to furnish the Subadviser at its principal office all prospectuses, proxy statements, and reports to shareholders which refer to the Subadviser in any way, prior to use thereof and not to use material if the Subadviser reasonably objects in writing five business days (or such other time as may be mutually agreed) after receipt thereof. During the term of this Agreement, the Co-Managers also agree to furnish the Subadviser representative samples of marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public, which make reference to the Subadviser. The Co-Managers further agree to prospectively make reasonable changes to such materials upon the Subadviser’s written request, and to implement those changes in the next regularly scheduled production of those materials. All such prospectuses, proxy statements, reports to shareholders, marketing and sales literature or other material prepared for distribution to shareholders of the Trust or the public which make reference to the Subadviser may be furnished to the Subadviser hereunder by electronic mail, first-class or overnight mail, facsimile transmission equipment or hand delivery.
8.
This Agreement may be amended by mutual consent, but the consent of the Trust must be obtained in conformity with the requirements
of the 1940 Act.
9. This Agreement shall be governed by the laws of the State of New York.
10. 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 1940 Act, shall be resolved by reference to such term or provision of the 1940 Act 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 Commission issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the
1940 Act, reflected in any provision of this Agreement, is related by rules, regulation or order of the Commission, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
11. PI and
AST hereby acknowledge receipt of the Subadviser's
Form ADV, Part 2 before or concurrently with the
execution of this Agreement pursuant to Rule 204-3 under the Investment Advisers Act of 1940.
IN WITNESS WHEREOF, the Parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.
PRUDENTIAL
INVESTMENTS LLC
By:
Name:
Title:
AST INVESTMENT SERVICES, INC.
By:
Name:
Title:
XXXXXXX PARTNERS, LLC
By:
Name:
Title:
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SCHEDULE A
As compensation for services provided by XXXXXXX Partners, LLC, Prudential Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay XXXXXXX Partners, LLC an advisory fee on the net assets managed by XXXXXXX Partners, LLC that is equal, on an annualized basis, to the following:
| Portfolio Name |
Advisory Fee |
AST
New Discovery Asset Allocation Portfolio 0.45%
of sleeve average daily net assets
Dated as
of March _____, 2012.
679582-4
