ADVANCED SERIES TRUST AST New Discovery Asset Allocation Portfolio SUBADVISORY AGREEMENT
EXECUTION COPY
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 Epoch Investment Partners, Inc., a Delaware corporation (Epoch 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 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 valuation procedures as provided to it by
the Co-Managers (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 and futures contracts to be purchased or sold by such portion of the Trust's portfolio,
as applicable, and may place orders with or through such persons, brokers, dealers or futures commission merchants (including but
not limited to Prudential Securities Incorporated (or any broker or dealer affiliated with 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
in writing. The Subadviser shall make reasonably available,
upon reasonable prior written notice, 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.
(g) The Subadviser acknowledges
that it is responsible for evaluating whether market quotations are readily available for the Trust’s portfolio securities
and whether those market quotations are reliable for purposes of valuing the Trust’s portfolio securities and determining the
Trust’s net asset value per share and promptly notifying the Co-Managers upon the occurrence of any significant event with
respect to any of the Trust’s portfolio securities in accordance with the requirements of the 1940 Act and any related
written guidance from the Commission and the Commission staff. 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 Epoch Investment Partners, Inc., 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Managing
Attorney and 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.
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, upon request, 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.
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: Xxxxxxx X. Xxxxxx
Title:
AST INVESTMENT SERVICES, INC.
By:
Name: Xxxxxxx X. Xxxxxx
Title: President
EPOCH INVESTMENT PARTNERS, INC.
By:
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Operating Officer
EXECUTION COPY
SCHEDULE A
As compensation for services provided by Epoch Investment Partners, Inc., Prudential Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Epoch Investment Partners, Inc.an advisory fee on the net assets managed by Epoch Investment Partners, Inc.that is equal, on an annualized basis, to the following:
| Portfolio Name |
Advisory Fee |
AST New Discovery Asset Allocation Portfolio |
0.275% of sleeve average daily net assets to $1 billion; and 0.20% of sleeve average daily net assets exceeding $1 billion |
Dated as of March __, 2012.
677032-2
