Exhibit (d)(5)
PRUDENTIAL EUROPE GROWTH FUND, INC.
SUBADVISORY AGREEMENT
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Agreement made as of this 10th of April, 2001 between Prudential
Investments Fund Management LLC, a New York limited liability company ("PIFM" or
the "Manager"), and Gartmore Global Partners, a Delaware general partnership
(the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated July
11, 1994 (the "Management Agreement"), with Prudential Europe Growth Fund, Inc.
(the "Fund"), a Maryland corporation and a diversified, open-end management
investment company registered under the Investment Company Act of 1940 (the
"1940 Act"), pursuant to which PIFM acts as Manager of the Fund; and
WHEREAS, the Subadviser is registered with the Securities and Exchange
Commission (the "SEC") as an investment adviser under the Investment Advisers
Act of 1940 Act, as amended ("Advisers Act"), and is regulated by the Investment
Management Regulatory Organization Limited ("IMRO") of the United Kingdom in the
conduct of its investment business and is a member of IMRO; and
WHEREAS, the Management Agreement permits PIFM to delegate certain of its
duties under the Management Agreement to other investment advisers, subject to
the requirements of the 1940 Act; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified herein,
if any (individually and collectively, with the Fund, referred to herein as 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 Directors
of the Fund, the Subadviser shall manage such portion of the assets of the
Fund as the Manager shall direct (the "Subadviser Assets") and shall manage
the Subadviser Assets, including the purchase, retention and disposition
thereof, in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Prospectus(es) (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 manage 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.
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The Manager agrees to provide the Subadviser with such assistance
as may be reasonably requested by the Subadviser in connection with
the Subadviser's activities under this Agreement, including, without
limitation, and to the extent available to the Manager, information
concerning the Fund, the funds available, or to become available, for
investment and generally as to the conditions of the Fund's affairs.
In particular, but without prejudice to the generality of the
foregoing, the Manager shall authorize the Fund's custodian to provide
such information to the Subadviser as it may reasonably require, and
to act upon the Subadviser's instructions given in the proper
performance by the Subadviser of this Agreement.
(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 as amended from time
to time (provided that the Subadviser shall not be liable for failing
to act in conformity with any updates to such documents during any
period when the Subadviser was not provided with such updates) and
with the instructions and directions of the Manager and of the Board
of Directors of the Fund communicated to the Subadviser by the Manager
or by 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, as amended (the "Code"), 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 SEC. Notwithstanding the
foregoing, the Manager shall remain responsible for ensuring the
Fund's overall compliance with the 1940 Act and the Code and the
Subadviser is only obligated to comply with this subsection (ii) with
respect to the Subadviser Assets
The Manager will also provide the Subadviser with reasonable
advance notice of any change in the Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with
such changes. In addition to such notice, the Manager shall provide to
the Subadviser a copy of a modified Prospectus reflecting such changes
Subject to the investment objectives and limitations imposed upon
the Subadviser under this Agreement and applicable law, the Subadviser
shall be entitled to exercise complete discretion to buy, sell,
retain, exchange or otherwise deal in the Subadviser Assets.
(iii) The Subadviser is authorized, subject to the supervision of
the Manager and the Board of Directors of the Fund, to establish and
maintain accounts on behalf of the Fund with, and place orders for the
purchase and sale of the Subadviser Assets with or through, such
persons, brokers (including, to the extent permitted by applicable
law, any broker affiliated with the Subadviser or the Manager) or
dealers ("brokers") as the Subadviser may elect and negotiate
commissions to be paid on such transactions. The Subadviser, however,
is not
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required to obtain the consent of the Manager or the Board of
Directors of the Fund prior to establishing any such brokerage
account. The Subadviser shall place all orders for the purchase and
sale of portfolio investments for the Fund's account with brokers
selected by the Subadviser. In providing the Fund with investment
management services, 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 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 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 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, 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 may be useful to the Subadviser in
connection with the Subadviser's services to other clients.
Notwithstanding the foregoing, the Manager acknowledges that the
Subadviser may also be subject to requirements by IMRO, and will
comply with such requirements to the extent they are not inconsistent
with applicable federal and state laws and regulations in the United
States. At a minimum, the Subadviser must comply with the laws of the
United States, but may also choose to comply with more stringent IMRO
requirements if the Subadviser deems necessary.
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 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. It is recognized that in some cases, this procedure may
adversely affect the price paid or received by the Fund or the size of
the position obtainable for, or disposed of by, the Fund.
(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. 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,
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without limitation, the valuation of the Fund's securities to such
extent as agreed from time to time between the Manager and the
Subadviser.
(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 to each of the Fund's separate series through
quantitative and qualitative analysis and consultations with such
Subadviser (ii) periodically make recommendations to the Fund's Board
as to whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to the
Fund's Board regarding the results of its evaluation and monitoring
functions. Subadviser recognizes that its services may be terminated
or modified pursuant to this process.
(vii) The Subadviser shall have the power to vote, either in
person or by proxy, all securities in which the Subadviser Assets may
be invested from time to time, and shall not be required to seek or
take instructions from the Manager or the Fund or take any action with
respect thereto. If both the Subadviser and another entity managing
assets of the Fund have invested in the same security, the Subadviser
and such other entity will each have the power to vote its pro rata
share of the security.
(b) 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 Series required by Rule 31a-1 under the 1940 Act. The
Subadviser agrees that all records that it maintains for the Series are the
property of the Fund, however, nothing in this clause shall be interpreted
to provide the Manager or the Fund with any property right in any software
used by the Subadviser to maintain such records. 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
both during the continuation of this Agreement and thereafter as may be
required for the Subadviser to confirm to all applicable laws and
regulations. 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.
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(c) The Subadviser agrees to maintain adequate compliance procedures
to ensure its compliance with the 1940 Act, the Advisers Act and other
applicable state and federal regulations.
(d) 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.
(e) Subject to the terms of this Agreement, the Subadviser is hereby
appointed the Manager's and the Fund's agent and attorney-in-fact for the
limited purposes of managing the Subadviser Assets, and executing account
documentation, agreements, contracts and other documents as the Subadviser
shall enter into with brokers, dealers, counterparties and other persons in
connection with its management of the Subadviser Assets. Subject to the
terms of paragraph 1(f) hereof, the Subadviser shall always act as agent of
the Manager and the Fund, not as principal.
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 during the term of this Agreement and pursuant
to this Agreement, the Subadviser will be entitled to the fee set out in
the attached Schedule A. Such fee will be computed daily and payable no
later than the fifteenth (15th) business day following the end of each
calendar quarter, from the Manager or the Fund, calculated at an annual
rate based on the Subadviser Assets' average daily net assets (as
calculated by the custodian of the Fund), and subject to any minimum fee
specified in Schedule A. The method of determining net assets of the Fund
for purposes hereof shall be the same as the method of determining net
assets for purposes of establishing the offering and redemption price of
the shares of that Fund as described in the Fund's Prospectus. If this
Agreement shall be effective for only a portion of a quarter, the aforesaid
fee shall be prorated for the portion of such quarter during which this
Agreement is in effect.
4. The Subadviser shall not be responsible for the Fund's or the Manager's
expenses, which shall include, but not be limited to, organizational and
offering expenses (which include out-of-pocket expenses, but not overhead
or employee costs of the Subadviser); expenses for legal, accounting and
auditing services; taxes and governmental fees; dues and expenses incurred
in connection with membership in investment company organizations; costs of
printing and distributing shareholder reports, proxy materials,
prospectuses, stock certificates and distribution of dividends; charges of
the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents
and dividend reinvestment plan agents; payment for portfolio pricing
services to a pricing agent, if any; registration and filing fees of the
SEC; expenses of registering or qualifying securities of the Fund for sale
in the various states; freight and other charges in connection with the
shipment of the Fund's portfolio
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securities; fees and expenses of non-interested Directors; salaries of
shareholder relations personnel; costs of shareholders meetings; insurance;
interest; brokerage costs; and litigation and other extraordinary or
non-recurring expenses
5. The Manager represents and warrants to the Subadviser as follows:
(a) The Manager is registered as an investment adviser under the
Advisers Act;
(b) The Fund is registered as an investment company under the 1940 Act
and the Fund's shares are registered under the Securities Act of 1933, as
amended (the "Securities Act");
(c) The Manager has filed a notice of exemption pursuant to Regulation
4.14 under the Commodity Exchange Act ("CEA") with the Commodity Futures
Trading Commission ("CFTC") and the National Futures Association ("NFA") or
is exempt from doing so;
(d) The Fund has filed a notice of exemption pursuant to Regulation
4.5 under the CEA with the CFTC and the NFA;
(e) The Manager is a limited liability company duly organized and
validly existing under the laws of the State of New York with the power to
own and possess its assets and carry on its business as it is now being
conducted;
(f) The Fund is a corporation duly organized and validly existing
under the laws of the State of Maryland with the power to own and posses
its assets and carry on its business as it is now being conducted;
(g) The execution, delivery and performance by the Manager of this
Agreement, the appointment of the Subadviser and the delegation to the
Subadviser of the duties and powers delegated to it under this Agreement,
are within the Manager's powers and have been duly authorized by all
necessary action on the part of its shareholders or managing unitholder,
and no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Manager for the
execution, delivery and performance by the Manager of this Agreement, and
the execution, delivery and performance by the Manager of this Agreement do
not contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Manager's governing
instruments, or (iii) any agreement, judgment, injunction, order, decree or
other instrument binding upon the Manager;
(h) The Form ADV of the Manager previously provided to the Subadviser
is a true and complete copy of the form filed with the SEC and the
information contained therein is accurate and complete in all material
respects and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which they
were made, not misleading;
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(i) The Manager acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(j) The Manager and the Fund have duly entered into the Management
Agreement pursuant to which the Fund authorized the Manager to enter into
this Agreement.
All representations and warranties made by the Manager shall survive
for the duration of this Agreement and the Manager shall promptly notify
the Subadviser in writing upon becoming aware that any of the foregoing
representations and warranties is no longer true.
6. The Subadviser represents and warrants to the Manager as follows:
(a) The Subadviser is registered as an investment adviser under the
Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to
Regulation 4.14 under the CEA with the CFTC and the NFA or is exempt from
doing so;
(c) The Subadviser is a general partnership duly organized and validly
existing under the laws of the State of Delaware with the power to own and
possess its assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Subadviser of this
Agreement is within the Subadviser's powers and has been duly authorized by
all necessary action on the part of its partners, and no action by or in
respect of, or filing with, any governmental body, agency or official is
required on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution,
delivery and performance by the Subadviser of this Agreement do not
contravene or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Subadviser's governing instruments, or
(iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Subadviser;
(e) The Form ADV of the Subadviser previously provided to the Manager
is a true and complete copy of the form filed with the SEC and the
information contained therein is accurate and complete in all material
respects and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which they
were made, not misleading; and
(f) The Subadviser acknowledges that it received a copy of the
Manager's Form ADV prior to the execution of this Agreement.
All representations and warranties made by the Subadviser shall
survive for the duration of this Agreement and the Subadviser shall
promptly notify the Manager in
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writing upon becoming aware that any of the foregoing representations and
warranties is no longer true.
7. The Subadviser, each of its affiliates and all respective partners,
officers, directors and employees ("Affiliates") and each person, if any,
who within the meaning of the Securities Act controls the Subadviser
("Controlling Persons") shall not be liable for any error of judgment,
mistake of law 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 ("Disabling
Conduct"). In the absence of Disabling Conduct, the Subadviser, any of its
Affiliates and each of the Subadviser's Controlling Persons, if any, shall
not be subject to any liability to the Fund or the Manager, for any act or
omission in the case of, or connected with, rendering services hereunder or
for any liability that may be sustained in the purchase, holding or sale of
Subadviser Assets; provided, however, that nothing herein shall relieve the
Subadviser from any of its obligations under applicable law, including,
without limitation, the federal and state securities laws and the CEA.
Furthermore, the Subadviser shall not be subject to liability to the
Fund or the Manager for any act or omission in the course of, or connected
with, the Manager or any other investment advisers or subadvisers rendering
services under the terms of any other prior investment advisory or
subadvisory agreements.
8. 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' 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, provided
that the Manager shall give the Subadviser reasonable written notice of the
date on which the Management Agreement is to terminate or, if the
Management Agreement is terminated without notice, will notify the
Subadviser of the termination of the Management Agreement on the day on
which it occurs. The Subadviser agrees that it will promptly notify the
Manager of the occurrence or, so far as reasonably practicable, the
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 1940 Act).
9. Nothing in this Agreement shall 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.
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10. Manager agrees to provide Subadviser with copies of the Fund's Articles
of Incorporation, Bylaws, Code of Ethics, and most recent Prospectus and
Statement of Additional Information on or before the date of this
Agreement. Furthermore, during the term of this Agreement, the Manager also
agrees to furnish the Subadviser at its principal office (or such other
address as notified to the Manager by the Subadviser) 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.
11. Any notice that is required to be given by the parties to each other
under the terms of this Agreement shall be in writing, delivered, or mailed
postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Gartmore Global Partners
c/o Villanova Capital
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department
Facsimile: (000) 000-0000
b) If to the Manager:
Prudential Investments Fund Management LLC
Gateway Center Three, 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Secretary
Facsimile: (000) 000-0000
12. This Agreement may be amended by mutual written consent, but the
consent of the Fund must be obtained in conformity with the requirements of
the 1940 Act.
13. This Agreement shall be governed by the laws of the State of New
York.
14. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, all of which shall together constitute
one and the same instrument.
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15. If any provision of this Agreement shall be held or made invalid by a
court decision or applicable law, the remainder of the Agreement shall not
be affected adversely and shall remain in full force and effect.
16. The Subadviser may effect transactions under the Agreement with or
through the agency of a person who provides services under a Soft
Commission Agreement, as defined in the rules of IMRO, and will report such
transactions to the Manager upon request. All such transactions must comply
with applicable federal and state regulations in the United States and any
mutually agreed upon policies and procedures. The Manager shall have no
responsibility for the Subadviser's activities under the rules of IMRO.
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 GARTMORE GLOBAL PARTNERS
MANAGEMENT LLC
BY: /s/ Xxxxxx X. Xxxxx BY: /s/ Xxxxxxx Xxxxxx
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Xxxxxx X. Xxxxx Xxxxxxx Xxxxxx
Executive Vice President Chief Investment Officer
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SCHEDULE A
to the Subadvisory Agreement between
Prudential Investments Fund Management LLC and
Gartmore Global Partners with respect to
Prudential Europe Growth Fund, Inc.
Average daily net assets managed Advisory Fees (per annum)
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under this Agreement ($million)
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Up to 50 0.60%
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over 50 and up to 100 0.50%
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over 100 up to200 0.40%
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over 200 0.30%
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subject to a minimum fee of $250,000 per annum.
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Dated as of April 10, 2001
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