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EXHIBIT (d)(2)(viii)
TARGET FUNDS
SMALL CAPITALIZATION VALUE FUND
(Credit Suisse Asset Management, LLC)
Subadvisory Agreement
Agreement made as of this 27th day of February 2001, between Prudential
Investments Fund Management LLC, a New York limited liability company ("PIFM" or
the "Manager"), and Credit Suisse Asset Management, LLC, a Delaware limited
liability company (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated
August 25, 1999 (the Management Agreement), with Target Funds (the "Trust"), a
Delaware business trust and an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), on behalf of its series the Small Capitalization Value Fund (the "Fund"),
pursuant to which PIFM will act as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and to manage such portion of the Fund as the
Manager shall from time to time direct, 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 the Board
of Trustees of the Trust, the Subadviser shall manage such portion of
the investment operations of the Fund as the Manager shall direct and
shall manage 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 and Statement of Additional Information (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 such portion
of the Fund's investments as the Manager shall direct and shall
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
Agreement and Declaration of Trust, By-Laws and Prospectus of the Fund
and with the written
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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, as amended, and all
other applicable federal and state laws and regulations. In connection
with the performance of its duties and obligations under this Agreement,
the Subadviser shall, among other things, prepare and file such reports
as are, or may in the future be, required by the Securities and Exchange
Commission.
(iii) The Subadviser shall determine the securities and
futures contracts to be purchased or sold by such portion of 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 or any broker or dealer affiliated with the
Subadviser) to carry out the policy with respect to brokerage as set
forth in the Fund's Prospectus or as the Board of Trustees 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 or any broker or dealer
affiliated with the Subadviser may be used as principal 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 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 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
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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 Trust's Board of Trustees
such periodic and special reports as the Trustees may reasonably
request. The Subadviser shall make reasonably available its employees
and officers for consultation with any of the Trustees or officers or
employees of the Trust with respect to any matter discussed herein,
including, without limitation, the valuation of the Fund's securities.
During the term of the Agreement and for one year thereafter,
the Manager and the Subadviser each agrees to keep confidential any and
all written or oral information that it may be provided regarding the
other, including its structure, management, work flows, organization,
financial controls and condition, personnel and other information that
is not publicly available and that is valuable and confidential to such
party (collectively, "Confidential Information"). Each party also agrees
to have in effect, and enforce, rules and policies designed to protect
against unauthorized access to or use of the Confidential Information.
Each party agrees to disclose the Confidential Information to its
employees and agents only to the extent necessary to carry out the
purpose for which the Confidential Information is disclosed.
(v) The Subadviser shall provide the Fund's 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.
(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. Conversely,
Subadviser and Manager understand and agree that if the Manager manages
the Fund in a "manager-of-managers" style, the Manager will, among other
things, (i) continually evaluate the performance of the Subadviser
through quantitative and qualitative analysis and consultations with
such Subadviser (ii) periodically make recommendations to the Trust's
Board as to whether the contract with one or more Subadviser(s) should
be renewed, modified, or terminated and (iii) periodically report to the
Trust's Board regarding the results of its evaluation and monitoring
functions. The Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(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.
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(c) The Subadviser shall keep the Fund'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 Fund required by Rule 31a-1 under the 1940 Act. The Subadviser agrees that
all records that it maintains for the Fund are the property of the Fund, 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 under the 1940 Act any such records as are required to
be maintained by it pursuant to paragraph 1(a) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures
reasonably designed to ensure its compliance with the 1940 Act, the Investment
Advisers Act of 1940, as amended, and other applicable state and federal
regulations.
(e) The Subadviser 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 Fund pursuant to the Management Agreement and, as
more particularly discussed above, shall oversee and review the Subadviser's
performance of its duties under this Agreement.
3. For the services provided and the expenses assumed pursuant to
this Agreement, the Manager shall pay the Subadviser as full compensation
therefor, a fee equal to the percentage of the Fund's average daily net assets
of the portion of the Fund managed by the Subadviser as described in the
attached Schedule A.
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 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
Fund 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 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. The Subadviser agrees that it
will
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promptly notify the Trust and the Manager of the occurrence or anticipated
occurrence of any event that would result in the assignment (as defined in the
0000 Xxx) of this Agreement, including, but not limited to, a change or
anticipated change in control (as defined in the 0000 Xxx) of the Subadviser.
Any notice or other communication required to be given pursuant to
Section 5 of this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Manager at Gateway Center Three,
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; (2)
to the Trust at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000, Attention: Secretary; or (3) to the Subadviser at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000, Attention: General Counsel.
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 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.
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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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Xxxxxx X. Xxxxx
Executive Vice President
CREDIT SUISSE ASSET MANAGEMENT, LLC
BY: /s/ Xxx Xxxxxx
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Xxx Xxxxxx
Managing Director
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SCHEDULE A
TARGET FUNDS
SMALL CAPITALIZATION VALUE FUND
(Credit Suisse Asset Management, LLC)
As compensation for the Subadviser's services, PIFM will pay the Subadviser a
fee equal, on an annualized basis, to 0.40% of the average daily net assets of
the portion of the Fund advised by the Subadviser.
Dated as of February 27, 2001
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