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Exhibit (d)(2)(x)
TARGET FUNDS
(International Equity Fund)
SUBADVISORY AGREEMENT
Agreement made as of this 29th day of October, 1999, between Prudential
Investments Fund Management LLC (PIFM or the Manager), a New York limited
liability company, and Lazard Asset Management, a division of Lazard Freres &
Co. LLC (the Adviser), a New York limited liability company.
WHEREAS, PIFM will enter into a management agreement (the Management
Agreement) with Target Funds (the Trust), a Delaware business trust and a
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, shares of the Trust are divided into separate series or
portfolios (each a portfolio), each of which is established pursuant to a
resolution of the Trustees of the Trust and the Trustees may from time to time
terminate such portfolios or establish and terminate additional portfolios.
WHEREAS, PIFM has the responsibility of evaluating, recommending,
supervising and compensating investment advisers to each portfolio of the Trust
and desires to retain the Adviser to provide investment advisory services to
the International Equity Fund of the Trust (the Portfolio) in connection with
the management of the Trust and the Adviser is willing to render such
investment advisory services.
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NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Trustees of
the Trust, the Adviser shall manage the investment operations of the Portfolio
and the composition of its portfolio, including the purchase, retention and
disposition thereof, in accordance with the Portfolio'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 Adviser shall provide supervision of the Portfolio's
investments and determine from time to time what investments and securities will
be purchased, retained, sold or loaned by the Portfolio, 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 Adviser shall act in conformity with the Declaration of Trust,
By-Laws and Prospectus of the Trust and the Portfolio and with the instructions
and directions of the Manager and of the 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 Adviser shall determine the securities and futures contracts
to be purchased or sold by the Portfolio and will place orders pursuant to its
determination with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential Securities
Incorporated and Lazard Freres & Co. LLC) in conformity with the policy with
respect to brokerage as set forth in the Trust's Registration Statement and
Prospectus or as the Trustees may direct from time to time. In providing the
Portfolio with
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investment supervision, it is recognized that the Adviser will give primary
consideration to securing the most favorable price and efficient execution.
Within the framework of this policy, the Adviser 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 Adviser's other
clients may be a party. It is understood that Prudential Securities Incorporated
and Lazard Freres & Co. LLC may each be used as broker for securities
transactions but that no formula has been adopted for allocation of the
Portfolio's investment transaction business. It is also understood that it is
desirable for the Trust that the Adviser 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 Adviser is authorized to place orders for the purchase and sale
of securities and futures contracts for the Portfolio with such brokers or
futures commission merchants, subject to review by the 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 Adviser in connection with the Adviser's services
to other clients.
On occasions when the Adviser deems the purchase or sale of a security or
futures contract to be in the best interest of the Portfolio as well as other
clients of the Adviser, the Adviser, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities or futures contracts to be sold or purchased in order to obtain the
most favorable price or lower brokerage commissions and efficient execution. In
such
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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
Adviser in the manner the Adviser considers to be the most equitable and
consistent with its fiduciary obligations to the Trust and to such other
clients.
(iv) The Adviser shall maintain all books and records with respect to
the 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 Trustees such periodic and special reports as the Board may reasonably
request.
(v) The Adviser shall provide the Trust's Custodian on each business
day with information relating to all transactions concerning the Portfolio's
assets and shall provide the Manager with such information upon request of the
Manager.
(vi) The investment management services provided by the Adviser
hereunder are not exclusive, and the Adviser shall be free to render similar
services to others.
(b) Services to be furnished by the Adviser under this Agreement may be
furnished through the medium of any of its partners, officers or employees.
(c) The Adviser shall keep the Portfolio's books and records required to
be maintained by the Adviser pursuant to paragraph 1(a)(iv) hereof and shall
timely furnish to the Manager all information relating to the Adviser'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 Adviser agrees that
all records which it maintains for the Portfolio are the property of the Trust
and the Adviser will surrender promptly to the Trust any of such records upon
the Trust's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records as are required to
be maintained by it pursuant to paragraph 1(a) hereof.
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(d) The Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940
(Advisers Act) and other applicable state and federal laws and regulations.
(e) The Adviser shall furnish to the Manager 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.
2. The Manager shall continue to have responsibility for all services to
be provided to the Portfolio pursuant to the Management Agreement and shall
oversee and review the Adviser's performance of its duties under this Agreement.
3. The Manager shall compensate the Adviser for the services provided and
the expenses assumed pursuant to this Subadvisory Agreement, a fee at an annual
rate of .40 of 1% of the average daily net assets of the Portfolio. This fee
will be computed daily and paid monthly in arrears.
4. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Portfolio, 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 Adviser's part in the
performance of its duties or from its reckless disregard of its obligations and
duties under this Agreement. Nothing in this Agreement shall be deemed to waive
any rights the Manager or the Trust may have against the Adviser under 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
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be terminated by the Trust at any time, without the payment of any penalty, by
the Trustees or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Portfolio, or by the Manager or the Adviser 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 Adviser's partners, officers or employees 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 dissimilar nature, nor limit
the Adviser's right to engage in any other business or to render services of
any kind to any other corporation, firm, individual or association, except as
described in Paragraph 1(a)(vi) above.
7. During the term of this Agreement, the Manager agrees to furnish the
Adviser 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 Adviser in any
way, prior to use thereof and not to use material if the Adviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. In the event of the termination of this
Agreement, the Manager will continue to furnish the Adviser copies of such
materials which refer to the Adviser. Sales literature may be furnished to the
Adviser hereunder by first class or overnight mail, facsimile transmission
equipment or hand delivery.
8. The Manager has delivered to the Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
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(a) Declaration of Trust, as filed with the Secretary of State of
Delaware (such Declaration of Trust, as in effect on the date hereof and as
amended from time to time, are herein called the Declaration of Trust);
(b) By-Laws of the Trust (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the By-Laws);
(c) Certified resolutions of the Trustees of the Trust authorizing
the appointment of the Manager and the Adviser and approving the form of this
Agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-1A (the Registration Statement), as filed with
the Securities and Exchange Commission (the Commission) relating to the
Portfolio and shares of beneficial interest of the Portfolio and all amendments
thereto;
(e) Notification of Registration of the Trust under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus of the Portfolio (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).
9. This Agreement may be amended by mutual consent, but the consent of
the Trust must be obtained in conformity with the requirements of the 1940 Act.
10. This Agreement shall be governed by the laws of the State of New York.
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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: /s/ Xxxxxx X. Xxxxx
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LAZARD ASSET MANAGEMENT
By:
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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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LAZARD ASSET MANAGEMENT
By: /s/ ILLEGIBLE
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