SUBADVISORY AGREEMENT WITH
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED
PRUDENTIAL WORLD FUND, INC.
PRUDENTIAL INTERNATIONAL VALUE FUND
SUBADVISORY AGREEMENT
Agreement made as of this 9th day of April, 2001 between Prudential
Investments Fund Management LLC ("PIFM" or the "Manager") and Bank of Ireland
Asset Management (U.S.) Limited (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated March
28, 2001 (the "Management Agreement"), with Prudential World Fund, Inc. (the
"Company"), 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 Company and is
authorized to enter into agreements with subadvisers to manage all or a portion
of the Company's assets; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the International Value Fund (the "Fund"), a series of the
Company, 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 Company, 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 its
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
Articles of Incorporation and By-Laws of the Company, with the
Prospectus and with the instructions and directions of the Manager
and of the Board of Directors of the Company, 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 Subadviser shall determine the securities and other
investments 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 Directors may direct from time to time. In managing
the Fund's assets, 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 solely 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 Company'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 purchases or sells the same
security or other investment on behalf 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 other
investments sold or purchased for the Fund and such other clients
in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of
the securities or other investments 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 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
Company's Board of Directors such periodic and special reports as
the Directors may reasonably request. The Subadviser shall make
reasonably
2
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 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. The
Manager acknowledges that Subadviser may effect transactions on
the Fund's behalf in a manner that is inconsistent with
transactions that the Subadviser recommends or effects on behalf
of its other clients. 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 the
Subadviser; (ii) periodically make recommendations to the
Company's Board as to whether the contract with one or more
subadvisers should be renewed, modified, or terminated; and (iii)
periodically report to the Company'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 Directors or officers of the
Company 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 1(a)(iv) 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 under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a)(iv) hereof.
(d) The Subadviser agrees to maintain 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.
3
(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. The Subadviser will have no
responsibility or authority with respect to the Fund other than those
responsibilities or grants of authority specifically set forth in this Agreement
and as are imposed by applicable law.
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. The Manager agrees to pay such fees regardless of whether
it receives fees from the Fund under the Management Agreement. The Subadviser
will not be required to waive its fees or reimburse Fund expenses, even if the
Manager waives its management fees or reimburses Fund expenses. The Manager
represents and warrants that this Agreement has been approved by the Fund's
shareholders in accordance with the 1940 Act.
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. The Subadviser shall not be obligated to conform
its activities to any directive of the Board of Directors of the Company to the
extent that compliance with such directive would (i) violate any applicable law,
rule, regulation or similar legal requirement; (ii) be inconsistent with or
violate the Fund's investment objectives, policies or restrictions as set forth
in the Prospectus; or (iii) be inconsistent with or violate any provision in the
Company's Articles of Incorporation or By-Laws.
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 Company, on
behalf of the Fund, at any time, without the payment of any penalty, by the
Board of Directors of the Company 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 promptly notify the Company 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.
4
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 Company at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000, Attention: Secretary; or (3) to the Subadviser at 00 Xxxxx Xxxx
Xxxx, Xxxxxxxxx, XX 00000, Attention: Vice President, Client Services.
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 Company or 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 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.
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
-------------------
Xxxxxx X. Xxxxx
Executive Vice President
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED
By: /s/ Xxxxx Xxxx
--------------
Xxxxx Xxxx
Senior Vice President
By: /s/ Xxxxxxxx Xxxxx
------------------
Xxxxxxxx Xxxxx
Senior Vice President
5
SCHEDULE A TO THE
SUBADVISORY AGREEMENT BETWEEN
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC AND
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED WITH RESPECT TO THE
INTERNATIONAL VALUE FUND OF PRUDENTIAL WORLD FUND, INC.
COMPENSATION SCHEDULE
Annual fee payable to the Subadviser as a percentage of average daily net assets
of the Fund managed by the Subadviser:
0.45% on the first $50 million of average daily net assets;
0.40% on the next $50 million;
0.30% on the next $500 million;
0.28% on the next $200 million; and
0.27% on the Fund's assets managed by the Subadviser over $800 million.
Dated as of April 9th, 2001
6
