GLOBAL UTILITY FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of the 4th day of February, 1991 and amended as of the
1st day of February, 1993 among Prudential Mutual Fund Management, Inc., a
Delaware corporation (the "Manager"), Wellington Management Company, a
Massachusetts general partnership (the "Subadviser") and Global Utility Fund,
Inc. (the "Fund"), a Maryland corporation and a diversified open-end
management investment company registered under the Investment Company Act of
1940 (the "1940 Act").
W I T N E S S E T H
WHEREAS, the Manager has entered into a Management Agreement, dated
February 4, 1991 (the "Management Agreement"), with the Fund, pursuant to which
Prudential Mutual Fund Management, Inc. will act as Manager of the Fund; and
WHEREAS, the Manager and the Fund each desire 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 Fund, 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 objectives,
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"), 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 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 with the instructions
and directions of the Manager and of the Board of Directors of the Fund 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.
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(iii) 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-Bache Securities Inc.) to carry
out the policy with respect to brokerage as set forth in the Fund's
Registration Statement and Prospectus or as the Board of Directors may
direct from time to time, in conformity with federal securities laws. 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-Bache Securities Inc. 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
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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 Fund'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 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
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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 the Fund's Board of Directors such periodic
and special reports as the Board of Directors of the Fund may reasonably
request.
(v) The Subadviser shall provide the Fund'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.
(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.
(b) The Subadviser shall authorize and permit any of its partners, officers and
employees who may be elected as directors or officers of the Fund to serve in
the capacities in which they are elected. Services to be furnished by the
Subadviser under
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this Agreement may be furnished through the medium of any of such partners,
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-l 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.
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 Subadviser's performance of its duties under this Agreement.
3. The Manager has delivered to the Subadviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:
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(a) Articles of Incorporation of the Fund, as filed with the Secretary
of State of Maryland (such Articles of Incorporation, as in effect on the
date hereof and as amended from time to time, are herein called the
"Articles of Incorporation");
(b) By-Laws of the Fund (such By-Laws, as in effect on the date
hereof and as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Board of Directors of the Fund
authorizing the appointment of the Manager and the Subadviser and approving
the form of this agreement;
(d) Registration Statement under the 1940 Act and the Securities Act
of 1933, as amended, on Form N-lA (the "Registration Statement"), as filed
with the Securities and Exchange Commission (the "Commission") relating to
the Fund and shares of the Fund's Common Stock and all amendments thereto;
(e) Notification of Registration of the Fund under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto; and
(f) Prospectus of the Fund (such Prospectus and Statement of
Additional Information, as currently in effect and as amended
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or supplemented from time to time, being herein called the "Prospectus")
4. For the services provided in this Agreement, the Manager will pay to the
Subadviser as full compensation therefor a fee at an annual rate of 0.50% of the
Fund's average daily net assets for the portion of such assets up to and
including $250 million; 0.35% of the Fund's average daily net assets in excess
of $250 million up to and including $500 million; 0.30% of the Fund's average
daily net assets in excess of $500 million up to and including $1 billion; and
0.25% of the Fund's average daily net assets in excess of $1 billion. This fee
will be computed daily and paid to the Subadviser 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 a breach of fiduciary duty with
respect to the receipt of compensation for services (in which case any award of
damages shall be limited to the period and the amount set forth in Section
36(b)(3) of the 0000 Xxx) or 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.
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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 Fund at any time, without
the payment of any penalty, by the Board of Directors of the Fund 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 parties. 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.
7. Nothing in this Agreement shall limit or restrict the right of any of the
Subadviser's partners, officers or employees who may also be a director, officer
or employee of 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.
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8. 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
stockholders of the Fund or the public, which refer to the Subadviser or its
clients 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. The Manager agrees to use its
best efforts to ensure that materials prepared by employees or agents of the
Manager or its affiliates which refer to the Subadviser or its clients in any
way are consistent with those materials previously approved by the Subadviser as
referenced in the preceding sentence. 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.
11. This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior
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agreements and understandings relating to the subject matter hereof.
12. Should any part of this Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
13. Where the effect of a requirement of the 1940 Act reflected in any provision
of this Agreement is altered by a rule, regulation or order of the Securities
and Exchange Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation or
order.
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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 MUTUAL FUND
MANAGEMENT, INC.
By /s/ Xxxxxx X. Xxxxx
------------------------------
Xxxxxx X. Xxxxx
Executive Vice President
WELLINGTON MANAGEMENT COMPANY
By /s/ Xxxxxx X. XxXxxxxxx
------------------------------
Xxxxxx X. XxXxxxxxx
Managing Partner
GLOBAL UTILITY FUND, INC.
By /s/ Xxxxxx X. Beach
------------------------------
Xxxxxx X. Beach
President
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