Portfolio Background and Management

AST and PSF are both open-end, management investment companies registered under the Investment Company Act of 1940, as amended (the 1940 Act). AST is organized as a Massachusetts business trust. PSF is organized as a Delaware statutory trust. Each Portfolio is organized as a separate series of AST or PSF, as applicable.

Prudential Investments LLC (PI), Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102, serves as the manager of PSFthe SP International Growth Portfolio under a management agreement with PSF on behalf of the Portfolio. PI, together with AST Investment Services, Inc. (ASTISI), One Corporate Drive, Shelton, Connecticut 06484, serve as co-managers of the AST International Growth Portfolio under a management agreement with AST on behalf of the Portfolio. PI and and ASTISI are referred to as the "Manager." As of December 31, 2011, PI served as the manager or co-manager to open-end investment companies and as manager or administrator to closed-end investment companies with aggregate assets of approximately $_______$161 billion. As of December 31, 2011, ASTISI served as the co-manager to all of the portfolios of AST, with aggregate assets of approximately $84.3 billion.

Prudential Mutual Fund Services LLC (PMFS), Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102, serves as the transfer and dividend disbursing agent for each portfolio of AST and PSF. PMFS is an affiliate of PI and ASTISI. PMFS provides customary transfer agency services to AST and PSF, including the handling of shareholder communications, the processing of shareholder transactions, the maintenance of shareholder account records, the payment of dividends and distributions, and related functions. For these services, PMFS receives compensation from AST and PSF and is reimbursed for its transfer agent expenses which include an annual fee per shareholder account, a monthly inactive account fee per shareholder account and its out-of-pocket expenses, including but not limited to postage, stationery, printing, allocable communication expenses and other costs. BNY Investment Servicing (U.S.) Inc. (BNYIS) serves as sub-transfer agent to AST and PSF. PMFS has contracted with BNYIS, 301 Bellevue Parkway, Wilmington, Delaware 19809, to provide certain administrative functions to PMFS. PMFS will compensate BNYIS for such services.

Shares of the Portfolios of PSF are distributed by Prudential Investment Management Services LLC (PIMS), located at 100 Mulberry Street, Newark, New Jersey 07102. AST does not have a distributor.

Investment subadvisory services are currently provided to each Portfolio by the investment subadvisers set forth below:

VVotingoting

AST and PSF serve as investment vehicles for insurance companies (each a Participating Insurance Company and collectively, Participating Insurance Companies) writing variable annuity contracts and variable life insurance policies (collectively, the Contracts). As of the Record Date, Prudential Annuities Life Assurance Corporation (PALAC), Pruco Life Insurance Company (Pruco), Pruco Life Insurance Company of New Jersey (Pruco NJ) are Participating Insurance Companies for both Portfolios. Each of PALAC, PICA, Pruco, and Pruco NJ is an affiliate of ASTISI and PI. In addition, with respect only to the SP International Growth Portfolio, several insurance companies which are not affiliates of ASTISI or PI are also Participating Insurance Companies. Each Participating Insurance Company holds assets invested in these Contracts in various separate accounts, each of which is divided into sub-accounts investing exclusively in a mutual fund or in a portfolio of a mutual fund. Therefore, Contract owners who have allocated their account values to applicable sub-accounts are indirectly invested in each Portfolio through the Contracts and should consider themselves shareholders of each Portfolio for purposes of this Proxy Statement.

Each Contract owner invested in each Portfolio at the close of business on the Record Date will be entitled to instruct the relevant Participating Insurance Company how to vote at the Meeting and any adjournment thereof, and will be entitled to give voting instructions equivalent to one vote for each full share of the Portfolio and a fractional vote for each fractional share of the Portfolio that he or she beneficially owns on the Record Date. In addition, in accordance with requirements of the Securities and Exchange Commission (the SEC), the relevant Participating Insurance Company will vote all shares of the Portfolio, including Portfolio shares owned by such Participating Insurance Company in its general account or otherwise, for which it does not receive voting instructions from Contract owners in the same proportion as the votes actually cast by Contract owners (i.e.(i.e., for the Proposal, against the Proposal, or abstain). The presence at the Meeting of less than all of the Participating Insurance Companies may be sufficient to constitute a quorum.Therefore, this proportional voting procedure may result in a relatively small number of Contract owners determining the outcome of the vote.

The required vote for shareholder approval of the Proposal, the various methods that shareholders may use to vote, and a description of how Portfolio shareholders may revoke voting instructions are described in more detail in this Proxy Statement under the caption "Voting Information."

To the knowledge of management, the executive officers and Trustees of each of PSF and AST, as a group, owned less than 1% of the outstanding Shares of each Portfolio as of December 30, 2011.

PROPOSALTO APPROVE NEW SUBADVISORY AGREEMENTS

At anan in-person meeting of each Board held on December 7, 2011, at which all of the Trustees of AST and PSF were in attendance (including all of the Trustees who are not “interested persons”"interested persons" of AST or PSF within the meaning of the 1940 Act (referred to herein as the “Independent Trustees”"Independent Trustees")), the Boards approved, based upon the Manager’sManager's recommendations, new subadvisory agreements between PI and ASTISI, as applicable, and Jennison. The Boards of Trustees of AST and PSF also approved submitting the new subadvisory agreements to Portfolio shareholders for their approval. Shareholder approval of one subadvisory agreement is not contingent upon shareholder approval of the other subadvisory agreement.

AST and PSF operate under an exemptive order from the SEC that generally permits the Manager, without approval from either Board, to enter into or amend agreements with unaffiliated subadvisers without obtaining shareholder approval. However, because Jennison and the Manager areunder the common control of Prudential Financial, Inc. (PFI) and Jennison is therefore an affiliate of the Manager, the exemptive order is inapplicable and shareholder approval of the Proposal is required.

Each of the proposed new subadvisory agreements (the New Subadvisory Agreements) between the Manager and Jennison is substantially identical. The proposed forms of the New Subadvisory Agreements are attached as Exhibit A to this Proxy Statement.

The Boards of Trustees of AST and PSF have approved, and recommend that shareholders approve, the adoption of a new subadvisory agreement for each Portfolio between PI and ASTISI, as applicable, and Jennison, under which Jennison, which is an affiliate of PI and ASTISI, would serve as subadviser to each Portfolio. If the New Subadvisory Agreements are approved by shareholders, Jennison would join the existing subadvisers of each Portfolio as a new additional subadviser. The fees and expenses incurred by each Portfolio will not change if the New Subadvisory Agreements are approved.

Current Subadvisers

Each Portfolio is currently subadvised by William Blair & Company L.L.C. (William Blair) and Marsico Capital Management LLC (Marsico) pursuant to subadvisory agreements between the Manager and each of the current subadvisers. Pursuant to the existing subadvisory agreements, the current subadvisers furnish investment advisory services in connection with the management of the Portfolios, subject to the supervision and oversight of the Manager. The table below sets out each current subadviser's length of service with the Portfolios:

The table below shows the compensation payable to the current subadvisers by PI under the existing subadvisory agreements for subadvisory services performed by the current subadvisers, as well as the date of the subadvisory agreements, and the date on which each agreement was last submitted to shareholders for approval.

*  For purposes of calculating the fee payable to William Blair with respect to the AST International Growth Portfolio and the SP International Growth Portfolio, the assets managed by William Blair in the AST International Growth Portfolio are aggregated with the assets managed by William Blair in the AST Advanced Strategies Portfolio, the Global Portfolio of PSF, the SP International Growth Portfolioof PSF, and any other portfolio subadvised by William Blair on behalf of PI and/or ASTISI pursuant to substantially the same investment strategy.

**  For purposes of calculating the fee payable to Marsico with respect to the AST International Growth Portfolio, the assets managed by Marsico in the AST International Growth Portfolio are aggregated with the assets managed by Marsico in the SP International Growth Portfolioof PSF and any other portfolio subadvised by Marsico on behalf of PI and/or ASTISI pursuant to substantially the same investment strategy.

¹  Shareholders were not asked to approve the subadvisory agreements because PI, ASTISI, AST and PSF operate under an exemptive order (the Order) from the Securities and Exchange Commission (the Commission) that generally permits them to enter into or amend agreements with unaffiliated investment subadvisers without obtaining shareholder approval each time. This authority is subject to certain conditions, including the requirement that the Boards of Trustees must approve any new or amended agreements with an investment subadviser.

For the fiscal year ended December 31, 2011, the AST International Growth Portfolio paid $24,079,881 for services provided by PI pursuant to the management agreement. For the fiscal year ended December 31, 2011, the SP International Growth Portfolio paid $1,007,816 for services provided by PI pursuant to the management agreement. The table below sets forth the total fees paid by PI to each of the current subadvisers for subadvisory services performed by the current subadvisers during the fiscal year ended December 31, 2011:

The Boards of Trustees of PSF and AST last approved the renewal of the subadvisory agreements with each of William Blair and Marsico at Board meetings held on June 15-17, 2011.

The Proposed New Subadviser

Jennison Associates LLC (Jennison) is an affiliate of both PI and ASTISI. Jennison is located at 466 Lexington Avenue, New York, New York 10017. As of December 31, 2011, Jennison managed in excess of $135 billion in assets. Jennison has served as an investment adviser since 1969 and has advised investment companies since 1990. Set forth below are the names, titles and principal occupations of the senior officers of Jennison. Unless otherwise indicated, the address of each individual is 466 Lexington Avenue, New York, New York 10017.

Jennison serves as subadviser to the following portfolios of PSF and AST which have investment objectives similar to the investment objective of the SP International Growth Portfolio and the AST International Growth Portfolio. The subadvisory fee rate is also set forth below.

The New Subadvisory AgreementAgreementss

The proposed New Subadvisory Agreements are substantially similar in all material respects to the existing subadvisory agreements with the current subadvisers, except for the subadvisory fee rate. The chart below compares the contractual subadvisory fee rates for each Portfolio’sPortfolio's existing subadvisers with the fee rate under the New Subadvisory Agreements.

*  For purposes of calculating the fee payable to William Blair with respect to the AST International Growth Portfolio and the SP International Growth Portfolio, the assets managed by William Blair in the AST International Growth Portfolio are aggregated with the assets managed by William Blair in the AST Advanced Strategies Portfolio, the Global Portfolio of PSF, the SP International Growth Portfolioof PSF, and any other portfolio subadvised by William Blair on behalf of PI and/or ASTISI pursuant to substantially the same investment strategy.

**  For purposes of calculating the fee payable to Marsico with respect to the AST International Growth Portfolio, the assets managed by Marsico in the AST International Growth Portfolio are aggregated with the assets managed by Marsico in the SP International Growth Portfolioof PSF and any other portfolio subadvised by Marsico on behalf of PI and/or ASTISI pursuant to substantially the same investment strategy.

***  For purposes of calculating the fee payable to Jennison with respect to the AST International Growth Portfolio and the SP International Growth Portfolio of PSF, the assets managed by Jennison in the SP International Growth Portfolio of PSF are aggregated with the assets managed by Jennison in the AST International Growth Portfolio and any other portfolio subadvised by Jennison on behalf of PI and/or ASTISI pursuant to substantially the same investment strategy.

The fee rate under the proposed New Subadvisory Agreements is lower than the subadvisory fee paid to Marsico, but higher than the fee rate applicable to William Blair.

It is important to note that an increase in the subadvisory fee paid by PI will not result in an increase in expenses borne by shareholders of either Portfolio, because PI pays the subadvisory fee out of the management fee that it receives from each Portfolio.

The proposed New Subadvisory Agreements, in brief, provide that:

•  as compensation for Jennison’sJennison's services, PI will pay Jennison a fee for each Portfolio equal, on an annualized basis, to the following: 0.375% of average daily net assets to $500 million; 0.325% of average daily net assets from $500 million to $1 billion; and 0.30% of average daily net assets over $1 billion.billion

•  subject to the supervision of the Manager and the Boards of Trustees of AST and PSF, respectively, Jennison is responsible for managing the investment operations of such portion of each Portfolio’sPortfolio's assets as delegated by the Manager and for making investment decisions and placing orders to purchase and sell securities for such portion of the Portfolio, all in accordance with the investment objective and policies of the Portfolio as reflected in its current Prospectus and Statement of Additional Information and as may be adopted from time to time by the Boards of Trustees. In accordance with the requirements of the 1940 Act, Jennison will provide the Manager with all books required to be maintained by an investment subadviser and will render to the Boards of Trustees such periodic and special reports as it may reasonably request.

•  eacheach New Subadvisory Agreement will remain in full force and effect for a period of two years from the date of its execution and will continue thereafter as long as its continuance is specifically approved at least annually by vote of a majority of the outstanding voting securities (as that term is defined in the 1940 Act) of each Portfolio, or by the Board, including the approval by a majority of the Independent Trustees, at a meeting called for the purpose of voting on such approval; provided, however, that (i) each New Subadvisory Agreement may be terminated at any time without the payment of any penalty, either by vote of the Board or by vote of a majority of the outstanding voting securities of the Portfolio; (ii) each New Subadvisory Agreement will terminate immediately in the event of its assignment (within the meaning of the 1940 Act) or upon the termination of the Management Agreement; and (iii) each New Subadvisory Agreement may be terminated at any time by Jennison or by the Manager, as applicable, on not more than 60 days' nor less than 30 days' written notice to the other party to the relevant New Subadvisory Agreement.

•  Each New Subadvisory Agreement provides that, in the absence of willful misfeasance, bad faith, or gross negligence in the performance of its duties, or reckless disregard of its obligations and duties thereunder, Jennison will not be liable for any act or omission in connection with its activities as subadviser to the Portfolios.

•  Jennison will select brokers to effect trades for each Portfolio and may pay a higher commission to a broker that provides bona fide research services (soft dollar arrangements). (Jennison may use these soft dollar arrangements in connection with providing subadvisory services to one or more of its clients other than the Portfolios. As a result, Jennison may benefit from these soft dollar arrangements to the extent it uses them to provide advisory services to its other clients. The Portfolios may benefit to the extent that Jennison uses soft dollar arrangements that Jennison has established with brokers or dealers that effect securities transactions for Jennison’sJennison's other clients. Jennison has indicated that it may utilize soft dollar arrangements.

•  Jennison will maintain certain books and records on behalf of the Portfolios.

•  Pursuant to the terms of an exemptive order issued by the SEC, PI may replace Jennison as subadviser with a non-affiliated subadviser or amend a non-affiliated subadviser's subadvisory agreement without obtaining shareholder approval.

•  PI may appoint additional non-affiliated subadvisers to manage each Portfolio’sPortfolio's assets without obtaining shareholder approval and, consequently, may determine the allocation of each Portfolio’sPortfolio's assets among these subadvisers.

Board Consideration of theNewSubadvisory Agreements

The Boards of Trustees of AST and PSF consist of the same ten (10) individuals, seven (7) of whom are Independent Trustees. Each Portfolio is a series of AST or PSF. The Boards of Trustees are responsible for the oversight of each Portfolio and its operations, and performs the various duties imposed on the trustees of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chairman of each Board of Trustees is an Independent Trustee. The Boards of Trustees have established four standing committees in connection with the governance of AST and PSF: the Audit Committee, the Governance Committee, the Compliance Committee, and the Investment Review and Risk Committee. Each committee is chaired by an Independent Trustee.

At an in-person meeting of each Board (the Board) held on December 7, 2011, at which all of the Trustees of AST and PSF were in attendance (including all of the Trustees who are not “interested persons”"interested persons" of AST or PSF within the meaning of the 1940 Act (referred to herein as the “Independent Trustees”"Independent Trustees")), the Boards approved, based upon the Manager’sManager's recommendations, the New Subadvisory Agreements. The Boards of Trustees of AST and PSF also approved submitting the New Subadvisory Agreements to Portfolio shareholders for their approval. Before approving the New Subadvisory Agreements, the Trustees reviewed investment performance and organizational materials regarding Jennison and its proposed portfolio management team and received a formal presentation from the Manager.

At the meeting, the Board received and considered a presentation by the Manager that detailed the reasons why it recommended that the Board appoint Jennison as an additional subadviser for each Portfolio. PI recommended

that the Board approve a new agreement with Jennison to assume responsibility for managing a portion of each Portfolio’sPortfolio's assets. In approving the agreement, the Trustees, including the Independent Trustees advised by independent legal counsel, considered the factors they deemed relevant, including the nature, quality and extent of services provided, the performance of each Portfolio, the profitability of PI and its affiliates, expenses and fees, and the potential for economies of scale that may be shared with each Portfolio and its shareholders.

Nature, quality and extent of services

The Board received and considered information regarding the nature and extent of services provided to each Portfolio by Marsico and William Blair (each Portfolio’sPortfolio's existing subadvisers) under the current subadvisory agreements and those that would be provided by Jennison under the New Subadvisory Agreements, noting that the nature and extent of services under the existing and new agreements were generally similar in that Marsico, William Blair and Jennison were each required to provide day-to-day portfolio management services and comply with all Portfolio policies and applicable rules and regulations.

With respect to the quality of services, the Board considered, among other things, the background and experience of the Jennison management team. The Board met with representatives from Jennison and reviewed the qualifications, backgrounds and responsibilities of the portfolio managers who would be responsible for the day-to-day management of each Portfolio. The Board was also provided with information pertaining to the organizational structure, senior management, investment operations, and other relevant information pertaining to Jennison. The Board noted that because Jennison already provided subadvisory services to several other portfolios of both PSF and AST, it was generally familiar with Jennison’sJennison's organizational, compliance and management structure. The Board noted that it received a favorable report from the the Chief Compliance Officer of PSF and AST regarding Jennison’sJennison's compliance policies and procedures.

The Board concluded that it was satisfied with the nature, extent and quality of the investment subadvisory services anticipated to be provided to eachPortfolio by Jennison and that there was a reasonable basis on which to conclude that each Portfolio would benefit from the subadvisory services to be provided by Jennison under the new subadvisory agreement.

Performance

The Board received and considered information regarding the performance of other AST and PSF portfolios managed by Jennison, and other accounts managed by the Jennison portfolio managers that used international growth investment strategies. The Board concluded that it was satisfied with these performance records.

Investment Subadvisory Fee Rates

The Board considered the proposed subadvisory fee rates payable by the Manager to Jennison under the proposed New Subadvisory Agreements. Based on the recent asset levels for each Portfolio, the Board noted that the effective subadvisory fee rate to be paid to Jennison under the proposed subadvisory arrangements were lower than the effective subadvisory fee rate paid to Marsico, but higher than the effective subadvisory fee rate paid to William Blair under the current subadvisory arrangements. The Board also noted that the Manager pays the subadvisory fees, and therefore any change in the proposed subadvisory fee rates would not have any impact on the amount of fees paid by either Portfolio. The Board indicated that the net investment management fees to be retained by the Manager under the proposed subadvisory arrangements would be reviewed in connection with future annual reviews of AST’sAST's and PSF’sPSF's advisory agreements. Overall, the Board concluded that the proposed subadvisory fee rates under the New Subadvisory Agreements were reasonable.

Profitability

Because the engagement of Jennison with respect to each Portfolio was new, there is no historical profitability with regard to the proposed subadvisory arrangements with each Portfolio. As a result, the Board did not consider

this factor. The Board noted that profitability would be reviewed annually in connection with any proposed future renewal of AST’sAST's and PSF’sPSF's investment management agreements or the subadvisory agreement for each Portfolio.

Economies of Scale

The Board noted that the proposed subadvisory fee schedules for each Portfolio contained breakpoints that reduce the fee rate on assets above specified levels. The Board also noted that it would consider economies of scale in connection with the annual approval review of advisory agreements.

Other Benefits to the Subadviser or its Affiliates from Serving as Subadviser

The Board considered potential ancillary benefits that might be received by Jennison and its affiliates as a result of its relationships with each Portfolio. The Board concluded that the potential benefits to be derived by Jennison included the ability to use soft dollar credits, brokerage commissions received by affiliates of Jennison, as well as the potential benefits consistent with those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to Jennison’sJennison's reputation. The Board concluded that the benefits to be derived by Jennison were consistent with the types of benefits generally derived by subadvisers to mutual funds.

ConclusionConclusion

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Exhibit A

ADVANCED SERIES TRUST
AST International Growth Portfolio

SUBADVISORY AGREEMENT

Agreement made as of this _____ day of _____, 2012 between Prudential Investments LLC (PI), a New York limited liability company and AST Investment Services, Inc. (AST), a Maryland corporation (together, the Co-Managers), and Jennison Associates LLC, a Delaware limited liability company (Jennison or the Subadviser);

WHEREAS, the Co-Managers have entered into a Management Agreement (the Management Agreement) dated May 1, 2003, with Advanced Series 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 ofthe 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, each as have been provided to it in advance by the Co-Managers (the Trust Documents) and with the written 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, assist the Co-Managers in the preparation and filing of 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 ofany updated Trust Documents.

(iii)  The Subadviser shall determine the securities, futures contracts and other investments 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 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 qualified to obtain best execution of such transactions who provide brokerage and/or research services, as such services are defined in Section 28( e)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. With respect to the previous sentence, the Co-Managers shall give the Subadviser prior advance notice before exercising discretion to effect transactions for portion of the Trust's portfolio being managed by Subadviser.

On occasions when the Subadviser deems the purchase or sale of a security, futures contract or other investment to be in the best interest of the 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, futures contracts or other investments to be sold or purchased. In such event, allocation of the securities, futures contracts or other investments 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 (bX5), (6), (7), (9), (10) and (11) and paragraph (f) of 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 ofthe Trust's securities or investments.

(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 oftheof the Trust's assets it manages, and shall provide the Co-Managers with such information upon request ofthe 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 ofthe 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-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 involving the Subadviser.

(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 ofany 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 lea) 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 ofthe Trust required by Rule 31a-l 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 (or provide copies) 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 ofthe 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 ofall records prepared in connection with (i) the performance of this Agreement and (ii) the maintenance ofcompliance procedures pursuant to paragraph 1 (d) hereof as the Manager may reasonably request.

(f)  The Subadviser shall be responsible for the voting ofall shareholder proxies with respect to the investments and securities held in the Trust's portfolio in accordance with the Subadviser's proxy voting policy, 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 portion of the Trust's portfolio securities that it manages and whether those market quotations are reasonable for purposes of valuing such securities or other investments and determining the Trust's net asset value per share and promptly notifying the Co-Managers upon becoming aware of the occurrence of any significant event with respect to the portion of the Trust's portfolio securities that it manages 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 or other investments of the Trust as may be required from time to time, including

making available information ofwhich the Subadviser has knowledge related to the securities or other investments being valued.

1.  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 ofthe 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).

2.  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. Expense caps or fee waivers for the Trust that may be agreed to by the Co-Managers, but not agreed to in writing by the Subadviser, shall not cause a reduction in the amount of the payment to the Subadviser by the Co-Managers.

3.  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.