Exhibit (d)(2)(vi)
SUBADVISORY AGREEMENT WITH
HOTCHKIS AND WILEY CAPITAL MANAGEMENT, LLC
STRATEGIC PARTNERS STYLE SPECIFIC FUNDS
(FORMERLY, TARGET FUNDS)
STRATEGIC PARTNERS LARGE CAPITALIZATION VALUE FUND
(FORMERLY, LARGE CAPITALIZATION VALUE FUND)
Agreement made as of this 22nd day of October, 2001, between Prudential
Investments Fund Management LLC, a New York limited liability company ("PIFM" or
the "Manager"), and Hotchkis and Wiley Capital Management, LLC (the
"Subadviser"), a Delaware limited liability company.
WHEREAS, the Manager has entered into a Management Agreement, dated August
25, 1999 (the "Management Agreement"), with Strategic Partners Style Specific
Funds (formerly known as Target Funds) (the "Trust"), a Delaware business trust,
on behalf of the Strategic Partners Large Capitalization Value Fund (formerly
known as the Large Capitalization Value Fund) (the "Fund"), a diversified,
open-end management investment company registered under the Investment Company
Act of 1940 as amended (the "1940 Act"), pursuant to which PIFM acts 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 hereby 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 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 Agreement
and Declaration of Trust and By-Laws of the Trust, with the
Prospectus and with the instructions and directions of the Manager
and of the Board of Trustees of the Trust, as delivered by the
Manager to the Subadviser, 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 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 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
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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 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. 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
Trust's Board as to whether the contract with one or more
subadvisers 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.
(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 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) hereof.
(d) The Subadviser agrees to maintain adequate compliance procedures 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
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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. Each party represents and warrants to the other that it is (a) duly
organized and existing and in good standing under the laws of its state of
organization; (b) duly qualified to conduct its business in all jurisdictions
that require such qualification; and (c) duly authorized to enter into and
perform this Agreement.
4. 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. This fee will be computed daily and paid monthly.
5. 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.
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 Trust, on behalf
of 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 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 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000-0000, Attention: Compliance
Department.
7. Nothing in this Agreement shall limit or restrict the right of any of
the Subadviser's partners, principals, members, officers or employees who may
also be a Trustee,
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officer or employee of the Trust 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.
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 York.
This Agreement together with any other written agreements between the parties
entered into concurrently with this Agreement contain the entire agreement
between the parties with respect to the transactions contemplated hereby and
supersede all previous oral or written negotiations, commitments and
understandings related thereto. No waiver by one party of any obligation of the
other hereunder shall be considered a waiver of any other obligation of such
party. If any portion of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
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 HOTCHKIS AND WILEY CAPITAL
LLC MANAGEMENT, LLC
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxx
------------------- ----------------
Xxxxxx X. Xxxxx Xxxxx Xxxxxx
Executive Vice President Chief Operating Officer
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EXHIBIT A
SUBADVISORY AGREEMENT DATED OCTOBER 22, 2001 BETWEEN PIFM
AND HOTCHKIS AND WILEY WITH RESPECT TO THE STRATEGIC PARTNERS
LARGE CAPITALIZATION VALUE FUND, A SERIES OF STRATEGIC PARTNERS
STYLE SPECIFIC FUNDS
COMPENSATION SCHEDULE
Annual fee payable to the Subadviser as a percentage of average daily net assets
of the Fund managed by the Subadviser:
0.30% on the Fund's assets managed by the Subadviser.
As of October 22, 2001
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