1
Exhibit (d)(1)(ii)
THE TARGET PORTFOLIO TRUST
(Small Capitalization Growth Portfolio)
AMENDED AND RESTATED SUBADVISORY AGREEMENT
Agreement made on the 26th day of May, 1999, and amended and restated
as of the 1st day of September, 1999, between Prudential Investments Fund
Management LLC (PIFM or the Manager), a New York limited liability company, and
Sawgrass Asset Management, L.L.C. (the Adviser), a Delaware limited liability
company.
WHEREAS, PIFM has entered into a management agreement (the Management
Agreement) with The Target Portfolio Trust (the Trust), a Delaware business
trust and an 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
Small Capitalization Growth Portfolio of the Trust (the Fund) in connection with
the management of the Trust and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Adviser is willing to render
such investment advisory services.
2
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 such portion of the investment operations of
the Fund as the Manager shall direct and shall manage the composition of such
portion of the Fund, including the purchase, retention and disposition thereof,
in accordance with the Fund's investment objective, 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") as delivered to the Adviser from time
to time by the Manager and subject to the following understandings:
(i) The Adviser shall provide supervision of such portion 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 it manages 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 Agreement and
Declaration of Trust, By-Laws and Prospectus of the Trust and the Fund as
provided to the Adviser by the Manager and with the written 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, as amended, and all other applicable federal and state laws and
regulations.
(iii) The Adviser shall determine the securities and commodities or
other assets to
2
3
be purchased or sold by such portion of the Fund 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) to carry out 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 Fund with investment
supervision, it is recognized that the Adviser will give primary consideration
to securing best 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 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 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 solely on the basis
of seeking lowest price. Therefore, the Adviser is authorized to place orders
for the purchase and sale of securities and commodities or other assets for the
Fund 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.
3
4
On occasions when the Adviser deems the purchase or sale of a security,
commodity or other asset to be in the best interest of the Fund 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, commodities or other assets to be sold or purchased in order to
obtain best execution. In such event, allocation of the securities, commodities
or other assets 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 (the Custodian) on
each business day with information relating to all transactions concerning the
portion of the Fund's assets it manages and shall provide the Manager with such
information upon request of the Manager. The Adviser shall reconcile its records
of the Fund's securities and cash managed by the Adviser with statements
provided by the Custodian at least once each month. The Adviser shall provide
the Manager with a written report on each such reconciliation, including
information on any discrepancies noted and actions taken by the Adviser in
response thereto, by the tenth business day of the following month to the extent
reasonably practicable.
(vi) The investment management services provided by the Adviser
hereunder are not
4
5
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 directors, officers
or employees.
(c) The Adviser shall keep the Fund'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 Fund 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.
(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 reports prepared in accordance with the compliance procedures
maintained 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 Fund pursuant to the Management Agreement and
shall oversee and review the Adviser's performance of its duties under this
Agreement.
5
6
3. The Manager shall compensate the Adviser for the services
provided and the expenses assumed pursuant to this Subadvisory Agreement at the
annual rate of .40 of 1% of the average daily net assets of the portion of the
Fund managed by the Adviser. This fee will be computed daily and paid monthly.
4. The Adviser shall not be liable for any error of judgment
or for any loss suffered by the Fund, 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, provided, however, that nothing in this Agreement
shall be deemed to waive any rights the Manager or the Trust may have against
the Adviser under federal or state securities laws, including for acts of good
faith.
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 Trustees 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 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 directors, officers or employees to engage in any other
business or to devote his or her time and
6
7
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.
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; provided, however, that any such item which describes or
characterizes the Adviser's investment process with respect to the Fund, the
names of any of its clients (other than the Trust or advisory clients of PIFM
and its affiliates) or any of its performance results shall be furnished to the
Adviser by first class or overnight mail, facsimile transmission equipment or
hand delivery prior to use thereof, and such item shall not be used if the
Adviser reasonably objects to such use in writing within forty-eight (48) hours
(or such other time as may be mutually agreed) after receipt thereof (provided,
however, that if such item is not received by the Adviser during normal business
hours on a business day, such period shall end forty-eight (48) hours after the
start of normal business hours on the next succeeding business day).
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.
7
8
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 on the day and year
set forth above.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
By /S/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Executive Vice President
SAWGRASS ASSET MANAGEMENT, L.L.C.
By /S/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Principal
8
