PRUDENTIAL 20/20 FUND
SUBADVISORY AGREEMENT
Agreement made as of this _____ day of________, 19___ between Prudential
Investments Fund Management LLC, a New York limited liability company (PIFM
or the Manager), and Xxxxxxxx Associates Capital Corp., a New York
Corporation (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement, dated
_________, 19____(the Management Agreement), with Prudential 20/20 Fund (the
Trust), a Delaware business trust and a non-diversified open-end management
investment company registered under the Investment Company Act of 0000 (xxx
0000 Xxx), pursuant to which PIFM will act as Manager of the Trust.
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Trust in connection with the management of a portion
of the portfolio of the Trust and the Subadviser is willing to render such
investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Board of
Trustees of the Trust, the Subadviser shall manage the investment
operations of a portion of the portfolio of the Trust and the composition
of a portion of the Trust's portfolio, including the purchase, retention and
disposition thereof, in accordance with the Trust's investment objectives,
policies and restrictions as stated in the Prospectus (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 a portion of the
Trust's investments and 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 Declaration of
Trust, By-Laws and Prospectus of the Trust and with the instructions and
directions of the Manager and of the Board of Trustees of the Trust and
will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986 and all other applicable federal and state
laws and regulations.
(iii) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by a portion of the Trust and will place
orders with or through such persons, brokers, dealers or futures commission
merchants (including but not limited to Prudential Securities Incorporated)
to carry out the policy with respect to brokerage as set forth in the
Trust's Registration Statement and Prospectus or as the Board of Trustees
may direct 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. It is understood that
Prudential Securities Incorporated may be used as principal broker for
securities transactions but that no formula has been adopted for allocation
of the Trust's investment transaction business. It is also understood that
it is desirable for the Trust that the Subadviser have access to
supplemental investment and market research and security and economic
analysis provided by brokers or futures commission merchants who may
execute brokerage transactions at a higher cost to the Trust than may
result when allocating brokerage to other brokers on the basis of seeking
the most favorable price and efficient execution. Therefore, the
Subadviser is authorized to place orders for the purchase and sale of
securities and futures contracts for the Trust with such brokers or futures
commission merchants, subject to review by the Trust's Board of Trustees
from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers or
futures commission merchants may be useful to the Subadviser in connection
with the Subadviser's services to other clients.
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 order to obtain the most favorable price or lower brokerage
commissions and efficient execution. 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.
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(iv) The Subadviser shall maintain all books and records with
respect to the Trust's portfolio transactions 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.
(v) The Subadviser shall provide the Trust's Custodian on each
business day with information relating to all transactions
concerning its portion of the Trust's assets and shall provide the
Manager with such information upon request of the Manager.
(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.
(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 Manager all information relating to the Subadviser's
services hereunder needed by the Manager to keep the other books and
records of the Trust required by Rule 31a-1 under the 1940 Act. 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 any such records as are required to be
maintained by it pursuant to paragraph 1(a) hereof.
2. The Manager shall continue to have responsibility for all services to
be provided to the Trust pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
3. For the services provided in this Agreement, the Manager will pay
to the Subadviser as full compensation therefor a fee at an annual rate of
.30% of the Fund's average daily net assets for the portion of such assets
up to and including $300 million, and .25% of the Fund's average daily
net assets in excess of $300 million. This fee will be computed daily
and paid to the Subadviser monthly.
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4. The Subadviser shall not be liable for any error of judgment or for
any loss suffered by the Trust or the Manager 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.
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 Trust, or by the Manager 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.
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 Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other material prepared for
distribution to shareholders of the Trust or the public, 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. Sales literature
may be furnished to the Subadviser hereunder by 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.
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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 FUND MANAGEMENT LLC
BY:
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Xxxxxx X. Early
Executive Vice President
XXXXXXXX ASSOCIATES CAPITAL CORP.
BY:
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