ADVANCED SERIES TRUST AST Small Cap Growth Portfolio SUBADVISORY AGREEMENT
AST
Small Cap Growth Portfolio
SUBADVISORY AGREEMENT
Agreement
made as of this 1st day
of May, 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 Emerald
Mutual Fund Advisers Trust, a Delaware corporation (Emerald 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 Sub adviser 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 ofthe 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 Sub adviser 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 Sub adviser 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 Sub adviser) 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 Sub adviser) 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 Sub adviser 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 Sub adviser, 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 Sub adviser
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
Sub adviser 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 Sub adviser, (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
Sub adviser recognizes that its services may be terminated or
modified pursuant to this process.
(vii) The Sub adviser acknowledges that the Co-Managers and the
Trust intend to rely on Rule l7a-lO, Rule 1 Of-3, Rule 12d3-1 and
Rule 17 e-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 Sub adviser shall keep the Trust's books and records
required to be maintained by the Subadviser pursuant to paragraph l(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 31
a-I 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 Sub adviser may retain a copy of such
records. The Subadviser further agrees to preserve for the periods
prescribed by Rule 3la-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 lea) hereof.
(d) In connection with its duties under this Agreement, the Sub
adviser 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 Sub adviser 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 Sub adviser (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 Sub adviser, 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 Sub adviser 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.
6. 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 Xxxxxx Xxxx, Xxxxx, XX 00000, Attention: Xxxxxxx
X. Xxxxx, President with a copy to Xxxx Xxxxxxxx, Senior Vice
President at the same address.
7. 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. 8. During
the term of this Agreement, the Co-Managers agree to furnish the Sub adviser 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 Sub adviser may be furnished to the Subadviser hereunder by
electronic mail, first-class or overnight mail, facsimile
transmission equipment or hand delivery.
9. 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.
10. This Agreement shall be governed by the laws of the State of
New York.
11. 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: /s/ Xxxxx
Xxxxxxxx
Name:
Xxxxx Xxxxxxxx
Title:
Executive Vice President
AST INVESTMENT SERVICES, INC.
By: /s/
Xxxxxxx Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Chief Executive Officer
EMERALD
MUTUAL FUND ADVISERS TRUST
By: /s/ Xxxxxxx
X. Xxxxx, XX
Name:
Xxxxxxx X. Xxxxx, XX
Title:
President
SCHEDULE
A
ADVANCED SERIES TRUST
As
compensation for services provided by Emerald Mutual Fund Advisers Trust, Prudential Investments LLC and AST Investment
Services, Inc. (formerly American Skandia Investment Services, Inc.)
will pay Emerald Mutual Fund Advisers Trust an advisory fee on
the net assets managed by Emerald Mutual Fund Advisers Trust that is
equal, on an annualized basis, to the following:
Portfolio Name
Small Cap Growth Portfolio (the "Portfolio")
Fee on
Combined Average Daily Net
Assets*
0.45% of combined average daily net assets up to $100 million; and
0.40% of combined average daily net assets over $100 million •
*Combined
assets are assets in the portfolios subadvised by Emerald Mutual Fund Advisers Trust that are managed by Prudential
Investments LLC, or by Prudential Investments LLC and AST Investment
Services, Inc., that have substantially the same investment
strategy (i.e., the Portfolio and Small Capitalization Growth
Portfolio, a series of Target Portfolio Trust).
Dated as of May 1, 2012.
