ADVANCED SERIES TRUST AST Academic Strategies Asset Allocation Portfolio SUBADVISORY AGREEMENT
ADVANCED
SERIES TRUST
AST Academic Strategies Asset Allocation Portfolio
SUBADVISORY AGREEMENT
Agreement
made as of this 14th'day of October, 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 Jefferies Asset Management, LLC, a Delaware limited liability
company (Jefferies 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 Rule 31a-l 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 repOlt 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 Subadviser acknowledges that the Co-Managers and the Trust intend to rely on Rule 17a-l0, Rule
lOf-3, Rule 12d3-1 and Rule 17e-l 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 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 tender 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 31 a-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 Jefferies
Asset Management, LLC, Xxx
Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxx,
XX 00000, Attention: General Counsel.
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, replies
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
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/ Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title: Senior Vice President
AST
INVESTMENT SERVICES, INC.
By:
/s/ Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title: President
JEFFERIES ASSET
MANAGEMENT, LLC
By: /s/ Xxxx X. Xx
Xxxxxx
Name: Xxxx X. Xx Xxxxxx
Title: Co-President
SCHEDULE
A
ADVANCED SERIES TRUST
As compensation for services provided by Jefferies Asset Management, LLC, Prudential Investments LLC and AST Investment Services, Inc. (formerly American Skandia Investment Services, Inc.) will pay Jefferies Asset Management, LLC an advisory fee on the net assets managed by Jefferies Asset Management, LLC that is equal, on an annualized basis, to the following:
Portfolio Name:
AST Academic Strategies Asset Allocation
Advisory Fee:
0.60%
of average daily net assets to $750 million;
0.55% of average daily net assets
from $750 million to $1 billion; and
0.50% of average daily net assets exceeding $1 billion
Dated as of: October 14, 2011
