Exhibit-99.(d)(9)
STRATEGIC PARTNERS ASSET ALLOCATION FUNDS
CONSERVATIVE GROWTH FUND
MODERATE GROWTH FUND
HIGH GROWTH FUND
SUBADVISORY AGREEMENT
Agreement made as of this 20th day of November, 2002 between
Prudential Investments LLC (PI or the Manager), a New York limited liability
company and RS Investment Management Company LLC (RS Investments or the
Subadviser),
WHEREAS, the Manager has entered into a Management Agreement dated
November 12, 1998 (the Management Agreement), with Strategic Partners Asset
Allocation Funds (the Fund), a Delaware business trust and a diversified,
open-end management investment company registered under the Investment Company
Act of 1940 as amended (the 1940 Act), pursuant to which PI acts as Manager of
the Fund; and
WHEREAS, PI desires to retain the Subadviser to provide investment
advisory services to the Fund and one or more of its series as specified in
Schedule A hereto (individually and collectively, with the Fund, referred to
herein as 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; and
NOW, THEREFORE, the Parties agree as follows:
1. (a) Subject to the supervision of the Manager and the Board of
Directors of the Fund, the Subadviser shall manage such portion 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 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 copies of the Articles of Incorporation, By-Laws and
Prospectus of the Fund provided to it by the Manager (the Fund
Documents) and with the instructions and directions of the
Manager and of the Board of Directors of the Fund, co-operate
with the Manager's (or its designee's) personnel responsible for
monitoring the Fund's
compliance 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.
The Manager shall provide Subadviser timely with copies of any
updated Fund documents.
(iii) The Subadviser shall determine the securities and
futures contracts to be purchased or sold by such portion of the
Fund's portfolio, as applicable, 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 Directors
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 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 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 effected by it
as 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 Directors may reasonably request. The Subadviser
shall make reasonably available its employees and officers for
consultation with any of the Directors 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 or its affiliate 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 such Subadviser (ii)
periodically make recommendations to the Fund's Board as to
whether the contract with one or more subadvisers should be
renewed, modified, or terminated and (iii) periodically report to
the Fund's Board regarding the results of its evaluation and
monitoring functions. 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 Directors or officers of
the Fund 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 of the Commission under the 1940 Act
any such records as are required to be maintained by it pursuant to
paragraph 1(a) hereof.
(d) In connection with its duties under this Agreement, 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.
(f) The Subadviser shall be responsible for the voting of all
shareholder proxies with respect to the investments and securities
held in the Fund's portfolio, subject to such reporting and other
requirements as shall be established by the Manager.
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. The Manager shall provide (or
cause the Fund's custodian to provide) timely information to the Subadviser
regarding such matters as the composition of assets in the portion of the Fund
managed by the Subadviser, cash requirements and cash available for investment
in such portion of the Fund, and all other information as may be reasonably
necessary for the Subadviser to perform its duties hereunder (including any
excerpts of minutes of meetings of the Board of Directors of the Fund that
affect the duties of the Subadviser).
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 Fund's average daily net assets
of the portion of the Fund managed by the Subadviser as described in the
attached Schedule A. Liability for payment of compensation by the Manager to the
Subadviser under this Agreement is contingent upon the Manager's receipt of
payment from the Fund for management services described under the Management
Agreement between the Fund and the Manager. Expense caps or fee waivers for the
Fund that may be agreed to by the Manager, but not agreed to by the Subadviser,
shall not cause a reduction in the amount of the payment to the Subadviser by
the Manager.
This Agreement shall not be considered effective, and the
Subadviser shall not earn any fee until such time as the Subadviser commences
the management of the portfolio.
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 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 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 Fund 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; provided that the Subadviser need not provide notice of
such an anticipated event before the anticipated event is a matter of public
record.
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 Fund
at Gateway Center Three, 4th Floor, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000,
Attention: Secretary; or (3) to the Subadviser at 000 Xxxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxxxxxxx, XX 00000.
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 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.
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 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. 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.
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 LLC
BY: /S/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: EVP
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RS INVESTMENT MANAGEMENT COMPANY LLC
BY: /S/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: CFO
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SCHEDULE A
STRATEGIC PARTNERS ASSET ALLOCATION FUNDS
CONSERVATIVE GROWTH FUND
MODERATE GROWTH FUND
HIGH GROWTH FUND
As compensation for services provided by RS Investment Management Company LLC,
Prudential Investments LLC (PI) will pay RS Investment Management Company LLC a
fee equal, on an annualized basis, to the following:
0.50% of the average daily net assets of the portion of the
Conservative Growth Fund subadvised by RS Investment Management
Company LLC.
0.50% of the average daily net assets of the portion of the Moderate
Growth Fund subadvised by RS Investment Management Company LLC.
0.50% of the average daily net assets of the portion of the High
Growth Fund subadvised by RS Investment Management Company LLC.
Dated as of November 20, 2002.
