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Exhibit (d)(2)(v)
SUBADVISORY AGREEMENT WITH
XXXXXXX XXXXXXX TREES & XXXXX, INC.
THE TARGET PORTFOLIO TRUST
INTERNATIONAL BOND PORTFOLIO
Subadvisory Agreement
Agreement made as of this 2nd day of March, 2001 between Prudential
Investments Fund Management LLC ("PIFM" or the "Manager") and Xxxxxxx Xxxxxxx
Trees & Xxxxx, Inc. (the "Subadviser").
WHEREAS, the Manager has entered into a Management Agreement, dated
November 9, 1992 (the "Management Agreement"), with The Target Portfolio Trust
(the "Trust"), a Delaware business trust, on behalf of the International Bond
Portfolio (the "Portfolio"), 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 Portfolio; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Portfolio and to manage such portion of the Portfolio
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 Portfolio as the Manager shall direct and
shall manage the composition of the Portfolio's portfolio, including
the purchase, retention and disposition thereof, in accordance with the
Portfolio'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 Portfolio'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
Portfolio, and what portion of the assets will be invested or
held uninvested as cash.
(ii) The Subadviser may delegate its responsibilities under
this agreement to its affiliated entities Xxxxxxx Xxxxxxx
Trees & Xxxxx (UK), Xxxxxxx Xxxxxxx Trees & Xxxxx Ltd. Pte.
(Singapore) and Xxxxxxx Xxxxxxx Trees & Xxxxx XX (Japan),
although it will remain liable for the acts of these entities
as if such delegation had not occurred.
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(iii) In the performance of its duties and obligations under
this Agreement, the Subadviser and its affiliated entities
shall act in conformity with the 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, 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 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.
(iv) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by such portion of the
Portfolio, and will place orders with or through such persons,
banks, brokers, dealers or futures commission merchants
(including but not limited to Prudential Securities
Incorporated or any broker or dealer affiliated with the
Subadviser) as it may determine and as authorized by
applicable law to carry out the policy with respect to
brokerage as set forth in the Portfolio's Prospectus or as the
Board of Trustees may direct from time to time. The
Subadviser, as agent for the Portfolio, may execute industry
standard agreements with banks, brokers, dealers, or futures
commission merchants that are necessary for it to perform its
duties under this Agreement although it shall remain
responsible for the provisions thereof, subject to the
standard of care described in paragraph 4 of this Agreement.
In providing the Portfolio 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 Portfolio's investment
transaction business. It is also understood that it is
desirable for the Portfolio 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 Portfolio 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 Portfolio
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.
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On occasions when the Subadviser deems the purchase or sale of
a security or futures contract to be in the best interest of
the Portfolio 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 Portfolio and to such other
clients.
(v) The Subadviser shall maintain all books and records with
respect to the Portfolio'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 Portfolio with respect to any matter
discussed herein, including, without limitation, the valuation
of the Portfolio's securities.
(vi) The Subadviser shall provide the Portfolio's Custodian on
each business day with information relating to all
transactions concerning the portion of the Portfolio's assets
it manages, and shall provide the Manager with such
information upon request of the Manager.
(vii) 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 Portfolio 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.
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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.
This clause shall not be construed to preclude the parties
from providing information which they are bound to disclose
under compulsion of law, or where requested by regulatory
agencies, or, if necessary, to banks, brokers and other
counterparties used to effect transactions, or to professional
advisers where reasonably necessary for the performance of
their professional services.
(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 Portfolio'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 Portfolio required by Rule 31a-1
under the 1940 Act. The Subadviser agrees that all records which it
maintains for the Portfolio are the property of the Portfolio, and the
Subadviser will surrender promptly to the Portfolio any of such records
upon the Portfolio'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 compliance procedures pursuant to paragraph
1(d) hereof as the Manager may reasonably request.
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2. The Manager shall continue to have responsibility for all services
to be provided to the Portfolio 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 Portfolio's average daily net assets of the
portion of the Portfolio 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 Portfolio 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 Trust, on behalf
of the Portfolio, 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 Portfolio, 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. Any such
termination shall be without prejudice to the completion of transactions
initiated by the Subadviser prior to the date of termination. The Subadviser's
fees shall be prorated to the date of termination as specified in the attached
Schedule A. 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 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxxxxx Xxxx, Director of Operations.
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 or the Portfolio 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.
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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 Portfolio 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 Portfolio 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
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Xxxxxx X. Xxxxx
Executive Vice President
XXXXXXX XXXXXXX TREES & XXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice Chairman
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EXHIBIT A
COMPENSATION SCHEDULE
Annual fee payable to the Subadviser as a percentage of average daily net assets
of the Portfolio managed by the Subadviser:
0.30% on the Portfolio's assets managed by the Subadviser.
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