A M E N D M E N T
TO SUB-INVESTMENT MANAGEMENT AGREEMENT ("AGREEMENT")
BETWEEN THE PRUDENTIAL INVESTMENT CORPORATION
("INVESTMENT MANAGER")
AND
PRICOA ASSET MANAGEMENT LIMITED ("SUB-INVESTMENT MANAGER")
This Amendment to the Agreement dated September 30, 1997, is dated
February 11, 1998, and effective as of January 1, 1998.
WHEREAS, the parties have agreed that the Sub-Investment Manager will
provide investment advisory services to the registered investment companies
established under the Investment Company Act of 1940, the investment companies
organized under the laws of the Grand Duchy of Luxembourg and the insurance
company general accounts, listed on Schedule A;
NOW THEREFORE, it is agreed as follows:
1. Section 12 of the Agreement is hereby amended to read as follows:
TERMINATION. Sub-Investment Manager may terminate this Agreement on 60
days' written notice to Investment Manager, with respect to managed
accounts and investment companies. Investment Manager may terminate
Sub-Investment Manager's appointment as an investment manager at any time
upon written notice which will take effect immediately upon receipt. With
respect to the registered investment companies, the agreement also (i) may
be terminated without the payment of any penalty, by the board of
directors of such registered investment company or by a vote of a majority
of the outstanding voting securities on not more than 60 days' written
notice to the Sub-Investment Manager; (ii) shall continue in effect for a
period more than two years from the date of execution, only so long as
such continuance is specifically approved at least annually in conformity
with the requirements of the Investment Company Act of 1940; and (iii)
shall terminate automatically for a particular registered investment
company upon the termination of Investment Manager's Sub-Advisory
Agreement for such registered investment company. Termination of this
Agreement will be without prejudice to the completion of transactions
already initiated and accordingly, despite termination of this Agreement,
Sub-Investment Manager shall be entitled to:
a. settle or close out all transactions entered into or for which the
order was placed with a broker or which was otherwise initiated or
agreed by Sub-Investment Manager on Investment Manager's behalf
hereunder, in good faith before Sub-Investment Manager received notice
of termination (or, if later, the expiration of such notice); and
b. require Investment Manager to pay all outstanding fees and expenses
including those incurred pursuant to paragraph (a) above.
2. Section 13 of the Agreement is hereby amended to read as follows:
NO ASSIGNMENT Sub-Investment Manager may not make on assignment (as that
term is defined in the Investment Company Act of 1940) of this Agreement
without the prior
written consent of Investment Manager. This Agreement, with respect to
registered investment companies, shall not be assigned by either party
hereto and shall automatically terminate forthwith in the event of such
assignment (as that term is defined in the Investment Company Act of
1940).
3. Schedules A and B to the Agreement are hereby amended and substituted
by the attached Schedules A and B, respectively:
IN WITNESS WHEREOF, the parties have caused this Amendment to be signed as
of the date indicated above.
THE PRUDENTIAL INVESTMENT CORPORATION
BY: /s/ Xxxxxxxx X. Xxxxxx
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NAME: Xxxxxxxx X. Xxxxxx
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TITLE: Senior Vice President
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PRICOA ASSET MANAGEMENT LIMITED
BY: /s/ Xxxxx X. Xxxxxxx
-----------------------
NAME: Xxxxx X. Xxxxxxx
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TITLE: Director
BY: /s/ Xxxx-Xxxx Chereau
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NAME: Xxxx-Xxxx Chereau
---------------------
TITLE: Director
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SCHEDULE A (AMENDED)
TO THE SUB-INVESTMENT MANAGEMENT AGREEMENT BETWEEN
THE PRUDENTIAL INVESTMENT CORPORATION AND
PRICOA ASSET MANAGEMENT LIMITED
SCHEDULE OF REMUNERATION
LIST OF FUNDS ANNUAL FEE
BOND FUNDS
Prudential International Bond Fund, Inc.
(formerly The Global Government Plus Fund, Inc.) Cost + 5% of cost
The Global Total Return Fund, Inc. Cost + 5% of cost
Prudential Intermediate Global Income Fund, Inc. Cost + 5% of cost
Prudential Global Limited Maturity Fund, Inc. Cost + 5% of cost
PRICOA Worldwide Investors Portfolio,
Global Bond Fund 30 basis points
MONEY MARKET FUNDS
PRICOA Money Market Portfolio, Deutsche Xxxx Series 30 basis points
PRICOA Money Market Portfolio, Pound Sterling Series 0 basis points
EQUITY FUNDS Prudential General Account:
-European Portion of the Small Cap Account Cost + 5% of cost
-European Small Cap Account Cost + 5% of cost
-European Large Cap Account Cost + 5% of cost
-European Portion of the Global Small Cap Account Cost + 5% of cost
Prudential Group Trust Account (Pru Plan)
-European Portion of International Large Cap Account Cost + 5% of cost
-European Portion of International Small Cap Account Cost + 5% of cost
TOLI GLOBAL-Roche Retiree Welfare Investment Trust Cost + 5% of cost
Prudential Global Genesis Fund, Inc. Cost + 5% of cost
Prudential Europe Growth Fund, Inc. Cost + 5% of cost
PRICOA Worldwide Investors Portfolio,
European Growth Fund 55 basis points
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1. The fee payable for each quarter is calculated at the above rates on the
average funds under management during the quarter.
2. Sub-Investment Manager will invoice Investment Manager at the end of each
quarter for actual fees due as calculated in accordance with 1 above and
invoices will be payable within 30 days of invoice date.
3. Investment Manager will undertake to use best endeavors to prepay each
quarter's estimated fees at the beginning of the relevant quarter (1 January, 1
April, 1 July, 1 October)
4. Fees are calculated pro-rata where funds are not managed for the full term of
a calendar quarter.
This amended schedule is deemed to be effective as of January 1, 1998.
FOR THE PRUDENTIAL INVESTMENT CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
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Date: 27 May 1998
-----------------------
FOR PRICOA ASSET MANAGEMENT LIMITED
Director: /s/ Xxxxx X. Xxxxxxx Director: /s/ Xxxx-Xxxx Chereau
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Date: 19 May 1998 Date: 20 May 1998
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SCHEDULE B
TO THE SUB-INVESTMENT MANAGEMENT AGREEMENT BETWEEN
THE PRUDENTIAL INVESTMENT CORPORATION AND
PRICOA ASSET MANAGEMENT LTD
INVESTMENT GUIDELINES FOR CLIENT ACCOUNTS
The investment guidelines for the following Prudential Mutual Funds are as set
out in each fund's statutory documentation:
PRUDENTIAL INTERNATIONAL BOND FUND, INC. (formerly, The Global Government Plus
Fund, Inc.)
The Fund's investment objective is to seek total return, the components of which
are current income and capital appreciation. The Fund attempts to achieve its
objective by investing at least 65% of its total assets in debt securities of
issuers located in at least three countries, excluding the United States (except
in periods of market weakness). The Fund invests in foreign debt securities
issued by foreign corporate issuers as well as securities issued or guaranteed
by foreign governments, semi-governmental entities, governmental agencies,
supranational entities and other governmental entities.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
THE GLOBAL TOTAL RETURN FUND, INC.
The Fund's investment objective is to seek total return, the components of which
are current income and capital appreciation. The Fund attempts to achieve its
objective by investing, under normal circumstances, at least 65% of its total
assets in governmental (including supranational), semi-governmental or
government agency debt securities or in short-term bank debt securities or
deposits in the United States and in foreign countries denominated in US dollars
or in foreign currencies, including debt securities issued or guaranteed by the
US Government and foreign governments, their agencies, authorities or
instrumentalities. The remainder is generally invested in corporate debt
securities or longer term bank debt securities.
The Fund will invest primarily in investment grade securities or in non-rated
securities determined by the Fund's investment adviser to be of equivalent
quality. The Fund may invest up to 10% of its total assets in debt securities
rated below investment grade, with a minimum rating of B, by either S&P or
Xxxxx'x or by another NRSRO, or, if unrated, are deemed to be of equivalent
quality by the investment adviser.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
PRUDENTIAL INTERMEDIATE GLOBAL INCOME FUND, INC.
The Fund's objective is to seek to maximize total return, the components of
which are current income and capital appreciation. The Fund will attempt to
achieve its objective by investing primarily in obligations issued or guaranteed
by the US Government, its agencies, authorities or instrumentalities and in
obligations issued or guaranteed by certain foreign governments, quasi-
governmental entities, governmental agencies, supranational entities or any of
their political subdivisions or instrumentalities. The Fund will invest
primarily in investment grade securities or in non-rated securities determined
by the Fund's investment adviser to be of equivalent quality. The Fund may
invest up to 10% of its total assets in debt securities rated below investment
grade, with a minimum rating of B, by either S&P or Xxxxx'x or by another NRSRO,
or if unrated, are deemed to be of equivalent quality by the investment adviser.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
PRUDENTIAL GLOBAL LIMITED MATURITY FUND, INC.
The Fund's investment objective is to maximize total return, the components of
which are current income and capital appreciation. The Fund seeks to achieve its
objective by investing primarily in a portfolio of investment grade debt
securities denominated in the US dollar and a range of foreign currencies. The
Fund will maintain a weighted average maturity of more than 2, but less than 5,
years with the maturity for any individual security generally not exceeding 10
years. The Fund may also invest up to 20% of its total assets in debt securities
rated below investment grade, with a minimum rating of B, by either S&P or
Xxxxx'x or by another NRSRO, or, if unrated, are deemed to be of equivalent
quality by the investment adviser.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
PRICOA WORLDWIDE INVESTORS PORTFOLIO, GLOBAL BOND FUND
The Fund's investment objective is to seek total return, the components of which
are current income and capital appreciation. The Fund seeks to achieve its
investment objective by investing primarily in investment grade bonds issued by
governments and corporations with varying maturities. It may also have limited
exposure to non-investment grade issues from emerging markets.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus as amended from time to time.
PRICOA WORLDWIDE INVESTORS PORTFOLIO, EUROPEAN GROWTH FUND
The Fund's investment objective is long-term growth of capital through
investment in a portfolio of transferable equity and debt securities of
companies domiciled in Europe.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus amended from time to time.
PRICOA MONEY MARKET PORTFOLIO
The Fund's investment objective is to provide the highest level of current
income in each designated currency consistent with safety of principal. Each
Series seeks to achieve this objective by investing in a portfolio of high
quality money market instruments and short-term debt obligations having a
maturity of one year or less denominated (1) in the designated currency of
the Series or (2) in US dollars (or other currencies) in combination with
forward currency exchange contracts to purchase matching amounts of the
designated currency.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's offering circular as amended from time to time.
PRUDENTIAL GLOBAL GENESIS FUND, INC.
The Fund's investment objective is long-term growth of capital. The Fund seeks
to achieve its investment objective by investing primarily in common stocks,
common stock equivalents (such as warrants and convertible debt securities) and
other equity securities (including preferred stocks) of smaller foreign and
domestic companies. Under normal circumstances, the Fund will invest 65% of its
total assets in such securities.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
PRUDENTIAL EUROPE GROWTH FUND, INC.
The Fund's investment objective is to seek long-term growth of capital. The Fund
attempts to achieve this objective by investing primarily in equity securities
(common stock, securities convertible into common stock and preferred stock) of
companies domiciled in Europe.
The Fund's detailed investment policies and investment restrictions are set out
in the Fund's Prospectus and Statement of Additional Information as amended from
time to time.
The investment guidelines for the remaining funds are as follows:
PRUDENTIAL GENERAL ACCOUNT
EUROPEAN PORTION OF THE SMALL CAP ACCOUNT
1. Investments will be composed primarily of securities publicly traded in
Europe.
2. Investments will be targeted in securities of small capitalization
companies. (Stocks which primarily make up the lowest 20 percent of the
total market capitalization of $30 million to $1.5 billion. The majority
of investments to be in the stocks with market capitalization less than
$750 million.)
3. No more than 10% of the portfolio will be invested in stocks larger than
$1.5 billion and not represented in the Salomon Brothers Extended Market
Index ("EMI").
4. No more than 10% of the portfolio will be invested in any one company at
the time of purchase.
5. The portfolio will not purchase more than 10% of the issued capital of any
one company.
6. Investments in cash and related instruments will not exceed 25% of the
portfolio, except during initial portfolio building.
7. Currency hedging of underlying stock positions only (requires approval of
Global Equities CIO). Foreign currency futures and options contracts can
only be employed to hedge underlying currency exposure (i.e., up to but
not more than 100% of underlying exposure to a foreign currency as
measured by the value of cash plus securities held in that foreign
currency).
EUROPEAN SMALL CAP ACCOUNT
1. Investments will be composed primarily of securities publicly traded in
Europe.
2. Investments will be targeted in securities of small capitalization
companies. (Stocks which primarily make up the lowest 20 percent of the
total market capitalization of $30 million to $1.5 billion. The majority
of investments to be in the stocks with market capitalization less than
$750 million.)
3. No more than 10% of the portfolio will be invested in stocks larger than
$1.5 billion and not represented in the Salomon Brothers Extended Market
Index ("EMI").
4. No more than 10% of the portfolio will be invested in any one company at
the time of purchase.
5. The portfolio will not purchase more than 10% of the issued capital of any
one company.
6. Investments in cash and related instruments will not exceed 25% of the
portfolio, except during portfolio building.
7. Currency hedging of underlying stock positions only (requires approval of
Global Equities CIO). Foreign currency futures and options contracts can
only be employed to hedge underlying currency exposure (i.e., up to but
not more than 100% of underlying exposure to a foreign currency as
measured by the value of cash plus securities held in that foreign
currency).
EUROPEAN LARGE CAP ACCOUNT
1. Investments will be composed primarily of publicly traded securities of
companies headquartered in European countries, the majority of which would
also be included in the MSCI European Index.
2. The portfolio will consist of no fewer than 25 securities, and no single
security will represent more than 10% of the portfolio at the time of
purchase.
3. The portfolio will not purchase more than 10% of the issued capital of any
one company.
4. Investments in cash and related instruments, except during the initial
portfolio building period, will not exceed 15% of the portfolio.
5. The portfolio may use futures contracts, forward contracts, options and
derivatives related to the underlying stock or foreign exchange markets of
the countries in which they are invested, provided such instruments are
used in bona fide hedging transactions.
6. Additional policies and guidelines will be established by the Portfolio
Management Group.
EUROPEAN PORTION OF THE GLOBAL SMALL CAP ACCOUNT
1. Investments will be composed primarily of securities publicly traded in
Europe.
2. Investments will be targeted in securities of small capitalization
companies. (Stocks which primarily make up the lowest 20 percent of the
total market capitalization of $30 million to $1.5 billion. The majority
of investments to be in the stocks with market capitalization less than
$750 million.)
3. No more than 10% of the portfolio will be invested in stocks larger than
$1.5 billion and not represented in the Salomon Brothers Extended Market
Index ("EMI").
4. No more than 10% of the portfolio will be invested in any one company at
the time of purchase.
5. The portfolio will not purchase more than 10% of the issued capital of any
one company.
6. Investments in cash and related instruments will not exceed 25% of the
portfolio, except during initial portfolio building.
7. Currency hedging of underlying stock positions only (requires approval of
Global Equities CIO). Foreign currency futures and options contracts can
only be employed to hedge underlying currency exposure (i.e., up to but
not more than 100% of underlying exposure to a foreign currency as
measured by the value of cash plus securities held in that foreign
currency).
PRUDENTIAL GROUP TRUST ACCOUNT (PRU PLAN)
EUROPEAN PORTION OF THE INTERNATIONAL LARGE CAP ACCOUNT
1. The investment objective will be long term capital appreciation through
investment in a broadly diversified portfolio from outside the United
States. The portfolio will be measured against the Xxxxxx Xxxxxxx
International "EAFE" Index.
2. Investments will be composed primarily of securities publicly traded in
Europe.
3. Portfolio will be invested primarily (75%) in securities of large
capitalization companies (greater than $1.5 billion).
4. No more than 10% of the portfolio will be invested in any one company at
the time of purchase.
5. The portfolio will not purchase more than 10% of the issued capital of any
one company.
6. Investments in cash and related instruments will not exceed 15% of the
portfolio, except during initial portfolio building.
7. Currency hedging of underlying stock positions only (requires approval of
Global Equities CIO).
EUROPEAN PORTION OF THE INTERNATIONAL SMALL CAP ACCOUNT
1. Investments will be composed primarily of securities publicly traded in
Europe.
2. Portfolio will be primarily (70%) in securities of small capitalization
companies. (Stocks which primarily make up the lowest 20 percent of the
total market capitalization of $30 million to $1.5 billion. The majority
of investments to be in the stocks with market capitalization less than
$750 million.)
3. No more than 10% of the portfolio will be invested in stocks larger than
$1.5 billion and not represented in the Salomon Brothers Extended Market
Index ("EMI").
4. No more than 10% of the portfolio will be invested in any one company at
the time of purchase.
5. The portfolio will not purchase more than 10% of the issued capital of any
one company.
6. Investments in cash and related instruments will not exceed 15% of the
portfolio, except during initial portfolio building.
7. Currency hedging of underlying stock positions only (requires approval of
Global Equities CIO).
TOLI GLOBAL- ROCHE RETIREE WELFARE INVESTMENT TRUST (EUROPEAN PORTION OF THE
GLOBAL ACCOUNT)
1. Investment will be composed primarily of securities publicly traded
represented in the EMI as well as the stock exchanges of Mexico, Thailand,
Indonesia, Philippines, Taiwan, and South Korea, as well as options and
futures contracts related to those securities and convertible bonds of
small capitalization companies. No options, futures, or other derivatives
will add any leverage to the portfolio. Investment may also be made in
cash or in the equivalents of cash or in any commingled money market
account maintained by Prudential.
2. Investments will be targeted primarily (i.e. a minimum of 70% of the
invested portion of the portfolio) in securities of companies which meet
Global Equities definition of small capitalization companies. Throughout
the world, Global Equities uses the largest market cap of the stocks in
lowest 20% of the market capitalization, within the U. S. markets as its
upper capitalization limit (currently $1.5 billion), except in Japan where
Global Equities applies the 20% test separately due to currency
fluctuations. (In Japan, the upper limit is currently $1.5 billion). The
majority of investments to be in the stocks with market capitalization
less than $750 million. Stocks which are included in the portfolio not
meeting the cap size definition should normally be ones which are
constituents of the EMI, except for Southeast Asia where larger traded
stocks may be used.
3. No more than 7% of any regional sub-portfolio will be invested in any one
company at the time of purchase; no more than 3% of the total global
portfolio will be so invested.
4. The portfolio will not purchase more than 10% of the issued capital of any
one company. The regional portfolios are generally kept diversified in 30
to 60 names. Industry weights are determined on a bottom up basis but
monitored at the portfolio level and may cut back to limit potential
sector risk.
5. Investments in cash and related instruments will not exceed 17% of the
portfolio, except during initial building.
6. Currency hedging will be allowed, although it is not anticipated that
Global Equities will employ an active currency overlay program. Any
currency hedging must be covered by an underlying cash/stock position.
7. Within the global portfolio, none of the four regions (Japan, Southeast
Asia, Europe, or North America) will be weighted at time of purchase (or
allocation shift) by more than 12% of the benchmark weight or less than
12% of the benchmark weight. This 12% guideline will also apply to country
weights within each regional sub-portfolio.
GENERAL
SUBJECT TO THE INVESTMENT GUIDELINES FOR THE CLIENT ACCOUNTS DESCRIBED HEREIN OR
AS SUBSEQUENTLY NOTIFIED TO SUB-INVESTMENT MANAGER IN WRITING:
1. The Client Accounts may contain securities which are or were the subject
of a relevant offer or issue, whether at the time Sub-Investment Manager
acquires them on behalf of Investment Manager, within a period of 12
months preceding that or otherwise. For the purpose of this paragraph, a
"relevant offer or issue" is an offer or issue of any securities (whether
or not those securities are to be listed on the London Stock Exchange or
any other recognized or designated investment exchange) which is or was
sponsored, underwritten, managed or arranged, or in connection with which
other services were provided, by Sub-Investment Manager or a connected
person.
2. Sub-Investment Manager may not commit Investment Manager to any obligation
to underwrite any issue or offer for sale of securities.
3. Sub-Investment Manager may, on behalf of Investment Manager, acquire or
dispose of units in a regulated collective investment scheme, whether or
not operated, managed or advised by Sub-Investment Manager or a connected
person.
4. Sub-Investment Manager may enter into repo or reverse repo transactions
but may not otherwise lend or borrow securities for any purpose.
5. Sub-Investment Manager is authorized by Investment Manager to deal in
warrants, options (including traded options) futures or contracts for
differences on behalf of Investment Manager (provided they are investments
as defined herein). The limits on margins will vary as between the Client
Accounts as set out in Schedule B above and the Prospectuses and
Statements of Additional Information mentioned therein.
6. Where the requisite currency of settlement is not the Client Accounts
Currency Sub-Investment Manager shall be entitled to use spot or forward
foreign exchange contracts
(and accordingly enter into them on Investment Manager's behalf) to fund
the acquisition of spot or forward investments or dispose of sale proceeds
in a foreign currency. Notwithstanding Sub-Investment Manager's right to
do this, Investment Manager accepts that if a liability in one currency is
matched by an asset in a different currency, or if any investment acquired
or sold hereunder is denominated or paid for in a currency other than the
Client Accounts Currency, a movement of exchange rates may be unfavorable
rather than favorable, on the gain or loss otherwise experienced on the
investment.
