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Exhibit (d)(2)(ix)
THE TARGET PORTFOLIO TRUST
(Small Capitalization Growth Portfolio)
SUBADVISORY AGREEMENT
Agreement made on this 1 day of August, 2000, between Prudential
Investments Fund Management LLC (PIFM or the Manager), a New York limited
liability company, and Xxxxx Xxxxxxx Asset Management (the Adviser), an indirect
subsidiary of The Chase Manhattan Corporation, a Delaware corporation.
WHEREAS, PIFM has entered into a management agreement (the Management
Agreement) with The Target Portfolio Trust (the Trust), a Delaware business
trust and an 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 Trust.
WHEREAS, shares of the Trust are divided into separate series or portfolios
(each a portfolio), each of which is established pursuant to a resolution of the
Trustees of the Trust, and the Trustees may from time to time terminate such
portfolios or establish and terminate additional portfolios.
WHEREAS, PIFM has the responsibility of evaluating, recommending,
supervising and compensating investment advisers to each portfolio of the Trust
and desires to retain the Adviser to provide investment advisory services to the
Small Capitalization Growth Portfolio of the Trust (the Fund) in connection with
the management of the Trust and to manage such portion of the Fund as the
Manager shall from time to time direct, and the Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the Parties agree as follows:
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1. (a) Subject to the supervision of the Manager and of the Trustees of the
Trust, the Adviser shall manage such portion of the investment operations of the
Fund as the Manager shall direct and shall manage the composition of such
portion of the Fund, including the purchase, retention and disposition thereof,
in accordance with the Fund's investment objective, 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") as delivered to the Adviser from time
to time by the Manager and subject to the following understandings:
(i) The Adviser shall provide supervision of such portion of the Fund's
investments and 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 it manages will be invested or held uninvested as cash.
(ii) In the performance of its duties and obligations under this Agreement,
the Adviser shall act in conformity with the Agreement and Declaration of Trust,
By-Laws and Prospectus of the Trust and the Fund as provided to the Adviser by
the Manager and with the written instructions and directions of the Manager and
of the 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.
(iii) The Adviser shall determine the securities and commodities or other
assets to be purchased or sold by such portion of the Fund and will place orders
pursuant to its determination 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
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forth in the Trust's Registration Statement and Prospectus or as the Trustees
may direct from time to time. In providing the Fund with investment
supervision, it is recognized that the Adviser will give primary consideration
to securing best execution. Within the framework of this policy, the Adviser
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 Adviser's other clients may be a party. It is understood that
Prudential Securities Incorporated may be used as a 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 Trust that the Adviser 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 Trust than may result when allocating brokerage to other brokers solely on
the basis of seeking lowest price. Therefore, the Adviser is authorized to
place orders for the purchase and sale of securities and commodities or other
assets for the Fund with such brokers or futures commission merchants, subject
to review by the 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 Adviser in
connection with the Adviser's services to other clients.
On occasions when the Adviser deems the purchase or sale of a security,
commodity or other asset to be in the best interest of the Fund as well as
other clients of the Adviser, the Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities, commodities or other assets to be sold or purchased
in order to obtain best
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execution. In such event, allocation of the securities, commodities or other
assets so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner the Adviser considers to
be the most equitable and consistent with its fiduciary obligations to the
Trust and to such other clients.
(iv) The Adviser shall maintain all books and records with respect to the
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 Trustees such periodic and special reports as the Board may reasonably
request.
(v) The Adviser shall provide the Trust's custodian (the 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. The Adviser shall reconcile its
records of the Fund's securities and cash managed by the Adviser with
statements provided by the Custodian at least once each month. The Adviser
shall provide the Manager with a written report on each such reconciliation,
including information on any discrepancies noted and actions taken by the
Adviser in response thereto, within five business days after the Adviser
receives the above-referenced statement from the Custodian, to the extent
reasonably practicable.
(vi) The investment management services provided by the Adviser hereunder
are not exclusive, and the Adviser shall be free to render similar services to
others.
(vii) The Manager shall forward to the Adviser or its proxy voting agent
any proxy materials relating to portfolio securities held by the portion of the
Fund managed by the Adviser.
(b) Services to be furnished by the Adviser under this Agreement may be
furnished through the medium of any of its directors, officers or employees.
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(c) The Advisor shall keep the Fund's books and records required to be
maintained by the Adviser pursuant to paragraph 1(a)(iv) hereof and shall
timely furnish to the Manager all information relating to the Adviser's
services hereunder needed by the Manager to keep the other books and records of
the Trust required by Rule 31a-1 under the 1940 Act. The Adviser agrees that
all records which it maintains for the Fund are the property of the Trust and
the Adviser will surrender promptly to the Trust any of such records upon the
Trust's request. The Adviser 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 Adviser agrees to maintain adequate compliance procedures to
ensure its compliance with the 1940 Act, the Investment Advisers Act of 1940
(Advisers Act) and other applicable state and federal laws and regulations.
(e) The Adviser shall furnish to the Manager copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) the
reports prepared in accordance with the compliance procedures maintained
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 shall oversee
and review the Adviser's performance of its duties under this Agreement.
3. The Manager shall compensate the Adviser for the services provided
and the expenses assumed pursuant to this Subadvisory Agreement at the annual
rate of .40 of 1% of the average daily net assets of the portion of the Fund
managed by the Adviser. This fee will be computed daily and paid monthly.
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4. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Fund, the Trust 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 Adviser's part in the
performance of its duties or from its reckless disregard of its obligations and
duties under this Agreement, provided, however, that nothing in this Agreement
shall be deemed to waive any rights the Manager or the Trust may have against
the Adviser under federal or state securities laws, including for acts of good
faith.
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 at any
time, without the payment of any penalty, by the Trustees 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 Adviser 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.
6. Nothing in this Agreement shall limit or restrict the right of any of
the Adviser's directors, officers or employees 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 dissimilar nature, nor limit
the Adviser'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
Adviser at its
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principal office all prospectuses, proxy statements, reports to shareholders,
sales literature or other material prepared for distribution to shareholders of
the Trust or the public, which refer to the Adviser in any way; provided,
however, that any such item which describes or characterizes the Adviser's
investment process with respect to the Fund, the names of any of its clients
(other than the Trust or advisory clients of PIFM and its affiliates) or any of
its performance results shall be furnished to the Adviser by first class or
overnight mail, facsimile transmission equipment or hand delivery prior to use
thereof, and such item shall not be used if the Adviser reasonably objects to
such use in writing within forty-eight (48) hours (or such other time as may be
mutually agreed) after receipt thereof (provided, however, that if such item is
not received by the Adviser during normal business hours on a business day,
such period shall end forty-eight (48) hours after the start of normal business
hours on the next succeeding business day).
8. This Agreement may be amended by mutual consent, but the consent of
the Trust 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.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on 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
XXXXX XXXXXXX ASSET MANAGEMENT
By /s/ X. X. Xxxxxxxx
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