EXHIBIT 99.B5(d)
PRUDENTIAL XXXXXXXX SERIES FUND, INC.
(Prudential Xxxxxxxx Active Balanced Fund)
SUBADVISORY AGREEMENT
Agreement made as of this 23rd day of January, 1998, between Prudential
Investments Fund Management LLC, a New York Limited Liability corporation (PIFM
or the Manager), and Xxxxxxxx Associates LLC, a New York limited liability
corporation (the Subadviser).
W I T N E S S E T H
WHEREAS, the Manager has entered into a Management Agreement, dated January
23, 1998 (the Management Agreement), with Prudential Xxxxxxxx Series Fund, Inc.
(the Corporation), a Maryland corporation and a diversified, 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 Corporation;
WHEREAS, the shares of common stock of the Corporation are divided into
separate series or funds, each of which is established pursuant to a resolution
of the Board of Directors of the Corporation, and the Board of Directors may
from time to time terminate such series or funds or establish and terminate
additional series or funds;
WHEREAS, the Manager has entered into a separate subadvisory agreement
dated January 23, 1998 with The Prudential Investment Corporation (PIC), a New
Jersey corporation, pursuant to which PIC will provide investment advisory
services to the Prudential Xxxxxxxx Active Balanced Fund (the Fund) with respect
to (i) the management of short-term assets, including cash, money market
instruments and repurchase agreements and (ii) the lending of portfolio
securities;
WHEREAS, the Manager desires to retain the Subadviser to provide investment
advisory services to the Fund in connection with the management of the Fund 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 of the Board of
Directors of the Corporation, the Subadviser shall manage the investment
operations of the Fund and the composition of the Fund's portfolio,
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 collectively called the "Prospectus") and subject to the
following understandings:
(i) The Subadviser shall provide supervision of the Fund's
investments and determine from time to time what investments and securities will
be
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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, By-Laws and Prospectus of the Fund and the Corporation and with
the instructions and directions of the Manager and of the Board of Directors of
the Corporation and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986 and all other applicable federal and
state laws and regulations.
(iii) The Subadviser shall advise PIC of the dollar amount of the
Fund's assets that shall be invested in repurchase agreements, money market
instruments or held in cash and advise PIC as to the securities available for
lending and the securities to be recalled from loan. In the event the agreement
with PIC is terminated, the Subadviser shall provide investment advisory
services to the Fund with respect to the management of short-term assets and the
lending of portfolio securities under this Agreement.
(iv) The Subadviser shall determine the securities and futures
contracts to be purchased or sold by 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) to carry out
the policy with respect to brokerage as set forth in the Corporation's
Registration Statement and Prospectus or as the Board of Directors may direct
from time to time. In
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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 may be used as principal broker for
securities transactions but that no formula has been adopted for allocation of
the Corporation'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 Board of
Directors of the Corporation 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
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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, the
Corporation and to such other clients.
(v) 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 Board of Directors of the Corporation such periodic and special
reports as the Board may reasonably request.
(vi) The Subadviser shall provide the Corporation's Custodian on
each business day with information relating to all transactions
concerning the Fund's assets and shall provide the Manager with such
information upon request of the Manager.
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(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.
(b) The Subadviser shall authorize and permit any of its directors, officers
and employees who may be elected as Directors or officers of the
Corporation 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 Corporation's books and records required to
be maintained by the Subadviser pursuant to paragraph 1(a)(v) 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 Corporation required by Rule 31a-1 under the 1940
Act. The Subadviser agrees that all records which it maintains for the
Corporation are the property of the Corporation and the Subadviser will
surrender promptly to the Corporation any of such records upon the
Corporation'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 of the Commission under the 1940 Act any
such records as are required to be maintained by it pursuant to paragraph
1(a)(v) hereof.
2. The Manager shall continue to have responsibility for all services
to be provided to the Corporation pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
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3. The Manager shall compensate the Subadviser for the services
provided and the expenses assumed pursuant to this Subadvisory Agreement, by
paying a fee at an annual rate of .30 of 1% of the Fund's average daily net
assets up to $300 million and .25 of 1% of average daily net assets in excess of
$300 million. This fee will be computed daily and paid monthly.
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.
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 Fund at any
time, without the payment of any penalty, by the Board of Directors of the
Corporation 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.
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 Corporation 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
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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 stockholders, 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. Any notice or other communication required to be given pursuant to
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, Xxxxxx, Xxx Xxxxxx 00000-0000, Attention: Secretary; or (2) to the
Subadviser at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: President.
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 and construed in accordance
with the laws of the State of New York without reference to choice of law
principles thereof and in accordance with the 1940 Act. In the case of any
conflict the 1940 Act shall control.
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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 ______________________________________________
Xxxxx X. Xxxxxx
President
XXXXXXXX ASSOCIATES LLC
By ______________________________________________
Xxxxx Xxxxxx
Senior Vice President
e:xxxxxxxx\agrmts\
xxx-xx0.xx
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