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Exhibit 99.d(2)
PRUDENTIAL GLOBAL TOTAL RETURN FUND, INC.
Subadvisory Agreement
Agreement made as of this 3rd day of October, 1988, as
amended and restated on January 15, 1996, and as of January 1, 2000 between
Prudential Investments Fund Management LLC, a New York limited liability
company and successor to Prudential Mutual Fund Management Inc., a Delaware
Corporation (PMF or the Manager), and The Prudential Investment Corporation, a
New Jersey Corporation (the Subadviser).
WHEREAS, the Manager has entered into a Management Agreement,
dated October 3, 1998, as amended and restated on January 15, 1996 (the
Management Agreement) , with Prudential Global Total Return Fund, Inc.,
formerly known as The Global Total Return Fund, Inc. (the Fund), a Maryland
corporation and a non-diversified open-end management investment company
registered under the Investment Company Act of 0000 (xxx 0000 Xxx), pursuant to
which PMF will act as Manager of the Fund.
WHEREAS, PMF desires to retain the Subadviser to provide
investment advisory services to the Fund in connection with the management of
the Fund 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 Directors
of the Fund, the Subadviser shall manage the investment operations of the Fund
and the composition of the Fund's portfolio, including the purchase, retention
and disposition thereof, in accordance with the Fund'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 the Fund's
investments and determine from time to time what investments and securities will
be purchased, retained, sold or loaned by the Fund, 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 Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the instructions and
directions of the Manager and of the Board of Directors of the Fund 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 the Fund 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 Fund's Registration
Statement and Prospectus or as the Board of Directors may direct from time to
time. In providing the Fund 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 a broker for
securities transactions but that no formula has been adopted for allocation of
the Fund's investment transaction business. It is also understood that it is
desirable for the Fund 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 Fund 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 Fund with
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such brokers or futures commission merchants, subject to review by the Fund's
Board of Directors 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 Fund 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 Fund and to such
other clients.
(iv) The Subadviser shall maintain all books and records with
respect to the Fund'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 Fund's Board of Directors such periodic and special
reports as the Directors may reasonably request.
(v) The Subadviser shall provide the Fund's Custodian on each
business day with information relating to all transactions concerning the Fund'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 directors or officers of the Fund 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 Fund's books and records required to be
maintained by the Subadviser pursuant to paragraph I(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 Fund
required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that all
records which it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon the
Fund'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 Fund pursuant to the Management Agreement and shall oversee and
review the Subadviser's performance of its duties under this Agreement.
3. The Manager shall pay the Subadviser at the annual rate of .375 of 1% of the
Fund's average daily net assets up to $500 million, .333 of 1% of average daily
net assets from $500 million to $1 billion and .293 of 1% of average daily net
assets in excess of $1 billion for furnishing the services described in
paragraph 1 hereof.
4. The Subadviser shall not be liable for any error of judgment or for any loss
suffered by the Fund 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 f
rom the date hereof only
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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 Fund at any time, without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of the Fund, 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 director,
officer or employee of the Fund 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 stockholders, sales literature or other material prepared for distribution to
stockholders of the Fund 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 Fund
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.
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
/s/ XXXXXX X. XXXXX
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Executive Vice President
THE PRUDENTIAL INVESTMENT CORPORATION
/s/ XXXX X. XXXXXXXXXX, XX.
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President
