PRUDENTIAL SERIES FUND, INC.
Subadvisory Agreement
Agreement made as of this day of August, 2000 between Prudential
Investments Fund Management LLC (PIFM or the Manager), Xxxxxxxx Associates LLC
(the Subadviser or Xxxxxxxx), and The Prudential Series Fund, Inc.
WHEREAS, the Manager has entered into a Management Agreement, dated August
11, 2000 (the Management Agreement), with The Prudential Series Fund, Inc. (the
Fund), a Maryland corporation 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 Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to certain series of the Fund specified below (the Series, or
Portfolios), and the Subadviser is willing to render such investment advisory
services; and
WHEREAS, this Agreement between PIFM and the Subadviser is intended to
supersede (i) the agreement, dated May 1, 1999, among the Fund, The Prudential
Insurance Company of America (Prudential), and the Subadviser concerning the
Fund's 20/20 Focus and Diversified Conservative Growth Portfolios and (ii) the
agreement, dated April 27, 1995, among the Fund, Prudential, and the Subadviser
concerning the Prudential Xxxxxxxx Portfolio.
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors of the Fund, the Subadviser shall manage the investment
operations of the Series of the Fund and the composition of the Series'
portfolio, including the purchase, retention and disposition thereof, in
accordance with the Series' 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 Series'
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the
Series, 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
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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. In connection therewith, 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 each Series, 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 Prospectus or as the Board of
Directors may direct from time to time. In providing the Series
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 principal
broker for securities transactions, but that no formula has been
adopted for allocation of the Series' investment transaction
business. It is also understood that it is desirable for the
Series 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 Series 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 Series with 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 Series as
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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 Series' 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. The Subadviser shall make
reasonably available its employees and officers for consultation
with any of the Directors or officers or employees of the Fund
with respect to any matter discussed herein, including, without
limitation, the valuation of the Fund's securities.
(v) The Subadviser shall provide the Series' Custodian on each
business day with information relating to all transactions
concerning the Series' 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 Series' 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 Series required by Rule 31a-1 under the 1940
Act. The Subadviser agrees that all records which it maintains for the
Series 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
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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 Series pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
3. The Manager shall reimburse the Subadviser for reasonable costs and
expenses incurred by the Subadviser determined in a manner acceptable to
the Manager in 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. For the services provided pursuant to this Agreement, the Manager
shall pay the Subadviser as full compensation therefor, an annual fee
(payable quarterly) equal to the following percentages of each listed
series' average daily net assets under the management of the Subadviser:
Diversified Conservative Growth Portfolio.
------------------------------------------
.30 of 1% on the first $300 million of average daily net assets under
the Subadviser's management, and 0.25 of 1% with respect to the average daily
net assets under the Subadviser's management in excess of $300 million.
20/20 Focus Portfolio
---------------------
.30 of 1% on the first $300 million of average daily net assets under
the Subadviser's management, and 0.25 of 1% with respect to the average daily
net assets under the Subadviser's management in excess of $300 million.
Prudential Xxxxxxxx Portfolio
-----------------------------
0.75% on the first $10,000,000 of the Portfolio's average daily net assets; and
0.50% on the next $30,000,000 of the Portfolio's average daily net assets; and
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0.35% on the next $25,000,000 of the Portfolio's average daily net assets; and
0.25% on the next $335,000,000 of the Portfolio's average daily net assets; and
0.22% on the next $600,000,000 of the Portfolio's average daily net assets; and
0.20% on the balance of the Portfolio's average daily net assets.
XX Xxxxxxxx International Growth Portfolio.
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0.60 of 1% of average daily net assets up to and including $300
million, 0.50 of 1% of average daily net assets in excess of
$300 million and up to and including $1.5 billion, and 0.45 of
1% of the average daily net assets over $1.5 billion.
SP Prudential U.S. Emerging Growth Portfolio.
---------------------------------------------
0.30 of 1% of the Portfolio's average daily net assets.
SP Strategic Partners Focused Growth Portfolio.
-----------------------------------------------
.30 of 1% on the first $300 million of average daily net assets under
the Subadviser's management, and 0.25 of 1% with respect to the average daily
net assets under the Subadviser's management in excess of $300 million.
For any Fund Portfolio other than those listed immediately above, PIFM
will pay Xxxxxxxx, with respect to the assets that Xxxxxxxx manages, a fee equal
to (i) for Portfolios other than small capitalization stock Portfolios, 50% of
the fee that PIFM receives, provided that such percentage is reduced at each
asset breakpoint by 5% for money market Portfolios and by 2.5% for other
Portfolios; and (ii) for small capitalization stock Portfolios, 65% of the fee
that PIFM receives, provided that such percentage is reduced at each asset
breakpoint by 2.5%.
6. 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 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.
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7. 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.
8. 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.
9. 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.
10. This Agreement shall be governed by the laws of the State of New
Jersey.
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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:_________________________________________
Executive Vice President
XXXXXXXX ASSOCIATES LLC
BY:________________________________________
Vice President
THE PRUDENTIAL SERIES FUND, INC.
BY: ________________________________________
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