ADVANCED SERIES TRUST AST Wellington Management Hedged Equity Portfolio SUBADVISORY AGREEMENT
ADVANCED
SERIES TRUST
AST Wellington Management Hedged Equity Portfolio
SUBADVISORY AGREEMENT
Agreement
made as of this ____ day of __________, 2011 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 Wellington Management Company, LLP, a Massachusetts
limited liability partnership (Wellington Management 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. ) With the exception of portfolio management of such portion of the Trust’s portfolio securities as has been delegated to the Subadviser by the Co-Managers, the Subadviser may delegate the performance of any or all of its other services or functions under this Agreement to an “affiliated person” (as defined in the 0000 Xxx) of the Subadviser to the extent not prohibited by, or inconsistent with, applicable law, including the requirements of the 1940 Act. Notwithstanding anything herein to the contrary, the Subadviser's liability to the Co-Managers and the Trust at all times under this Agreement shall not be affected in any way whatsoever by any delegation of services or functions by the Subadviser to any “affiliated person” of the Subadviser and the Subadviser (and not the Co-Managers) shall be solely responsible for any fees, charges, or expenses owed to such “affiliated person.” In addition, notwithstanding any other provision of the Agreement, the Subadviser: (x) may provide information about the Co-Managers and the Trust to any “affiliated person” of the Subadviser to which services or functions have been delegated hereunder; (y) will act in good faith and with due diligence in the selection, use, and monitoring of any “affiliated person” of the Subadviser to which services or functions have been delegated hereunder; and (z) shall ensure that any “affiliated person” of the Subadviser to which services or functions have been delegated hereunder is subject to confidentiality and non-disclosure obligations that are substantially similar to the confidentiality and non-disclosure obligations to which the Subadviser is subject with respect to the Trust.
(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 of
it 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. 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) [Reserved.]
(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. Subadviser further agrees to provide to
the Co-Managers written copies of such procedures and any amendments thereto on a timely basis.
(e) The Subadviser shall furnish to the Co-Managers with a certification
regarding (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) In the event that market quotations are not readily available or, in the Subadviser’s
view, are not reliable for purposes of valuing the Trust’s portfolio securities that the Subadviser manages,
and the Subadviser will promptly notify the Co-Managers and will recommend a fair value methodology (and indicate
a price using that methodology) for use by the Trust 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 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Legal and Compliance.
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 and subject to satisfaction of applicable
regulatory requirements, 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 to
such reference to the Subadviser 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 (i) furnish the Subadviser, upon Subadviser’s
request, representative samples of marketing and sales literature and other materials
that expressly reference the Subadviser prior to final
production and use or distribution of such literature and materials and (ii) not
to use or distribute any such literature
or materials if the Subadviser reasonably objects in writing within four
(4) business days (or such other period as may be mutually agreed) after Subadviser’s receipt
thereof. The Subadviser’s right to object to such literature and materials and
provide proposed revisions is limited solely to
the portions of such literature and materials
that expressly relate to the Subadviser. Notwithstanding the forgoing, advance
review and approval shall not be
required from the Subadviser
with respect to: (i) sales literature,
applications, confirmation statements, account statements, or
forms in which the Subadviser is only referenced in a listing
of advisors to the Trust or the name of the specific series of the Trust
subadvised by Wellington Management is only referenced in a listing or
short description of relevant variable
insurance product investment options; (ii) web pages that solely refer
to the name of the specific series of the Trust subadvised by Wellington
Management and such series’ investment performance and/or
portfolio holdings and that do
not provide additional information relating to such series or Wellington Management; (iii)
literature or materials that are based upon literature or
materials that were previously approved by Subadviser where no material changes have been made to such previously
approved literature or materials; or (iv) other
materials as agreed upon mutually by the Co-Managers and the Subadviser. Notwithstanding
the foregoing, for any literature or materials that are submitted to Wellington Management for its advance review
and written approval in accordance with this Section 7,
if Wellington Management does not, within four (4)
business days of its receipt thereof, expressly disapprove in writing or request in writing that specific changes
be made to specific pieces of literature or other materials, then such pieces of literature or other materials
shall be deemed approved by Wellington Management. If the Co-Managers or their affiliates agree in writing to
incorporate into such literature or materials the specific changes requested by Subadviser, the Co-Managers and
their affiliates shall not be required to re-submit such literature or materials to Subadviser for its review or
approval. The Co-Managers further agree
to use their reasonable best efforts to ensure that materials prepared by their employees or agents or their
affiliates that refer to the Subadviser in any way are consistent with those materials previously approved by the
Subadviser as referenced in the first sentence of this paragraph. 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.
It is understood that “Wellington Management” and any derivative names or logos associated with such name are the valuable property of the Subadviser, that the Trust has the right to include such phrase as a part of the name of the series of the Trust managed by the Subadviser or for any other purpose only so long as this Agreement shall continue, and that Wellington Management does, in fact, consent to the use of such name as a part of the name of the series of the Trust identified herein. Subadviser represents and warrants that the inclusion of “Wellington Management” in the name of the series of the Trust identified herein shall not: (i) infringe the title or any patent, copyright, trade secret, trademark, service xxxx, or other proprietary right of any third party and (ii) violate the terms of any agreement or other instrument to which Subadviser or any of its affiliates is a party.
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.
430665-4
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:
WELLINGTON MANAGEMENT COMPANY, LLP
By:
Name:
Title:
430665-4
SCHEDULE A
As compensation for services provided by Wellington Management Company, LLP, Prudential Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Wellington Management Company, LLP an advisory fee on the net assets managed by Wellington Management Company, LLP that is equal, on an annualized basis, to the following:
Portfolio
Advisory Fee
AST Wellington Management Hedged Equity Portfolio
0.45% of average daily net assets to $500 million;
0.425% of average daily net assets over $500 million to $1.5 billion; 0.40% of average daily net assets over $1.5 billion to $3 billion; and 0.375% of average daily net assets over $3 billion
Dated as of __________ __, 2011.
430665-4
