THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of the ____ day of ____________, 2000, between
Prudential Investments Fund Management LLC (the "Manager"), and Fidelity
Management & Research Company (the "Adviser") a corporation organized under the
laws of the State of Massachusetts.
WHEREAS, the Manager will enter into a management agreement (the
"Management Agreement") with The Prudential Series 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"), pursuant
to which the Manager will act as manager of the Fund.
WHEREAS, shares of the Fund are divided into separate series or
portfolios, each of which is established pursuant to a resolution of the
Directors of the Fund, and the Directors may from time to time terminate such
portfolios or establish and terminate additional portfolios.
WHEREAS, the Manager desires to retain the Adviser to provide investment
advisory services to the SP Large Cap Value and SP Small/Mid Cap Value
portfolios of the Fund (the "Portfolios") in connection with the management of
the Fund and to manage such portion of the Portfolios 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:
1. (a) Subject to the supervision of the Manager and of the
Directors of the Fund, the Adviser shall manage investment operations of
the Portfolios as the Manager shall direct, and shall manage the
composition of the Portfolios' investments, including the purchase,
retention and disposition thereof, in accordance with the Portfolios'
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") 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 the Portfolios'
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Portfolios,
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
Articles of Incorporation, By-Laws and Prospectus of the Fund and the
Portfolios as provided to the Adviser by the Manager and with the written
instructions and directions of the Manager and of the Directors of the
Fund, and will comply with the requirements of the 1940 Act and use
reasonable efforts to comply with the Internal Revenue Code of 1986, as
amended (including the diversification requirements of section 817(h) of
the Code), and all other applicable federal and state laws and
regulations.
(iii) The Adviser shall determine the securities, futures,
commodities or other assets to be purchased or sold by the Portfolios, and
will place orders
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pursuant to its determination with or through such persons, brokers,
dealers or futures commission merchants (which may include Prudential
Securities Incorporated) to carry out the policy with respect to brokerage
as set forth in the Fund's Registration Statement and Prospectus or as the
Directors may direct from time to time. In providing the Portfolios with
investment supervision, it is recognized that the Adviser will give
primary consideration to securing the most favorable overall terms. 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, but is not required to, be used as
broker for securities transactions but that no formula has been adopted
for allocation of the Portfolios' investment transaction business. The
Adviser may pay a broker-dealer that provides research and brokerage
services a higher commission for a particular transaction than otherwise
might have been charged by another broker-dealer if the Adviser determines
that the higher commission is reasonable in relation to the value of the
brokerage and research services that such broker-dealer provides, viewed
in terms of either the particular transaction or the Adviser's overall
responsibilities with respect to accounts managed by the Adviser.
On occasions when the Adviser deems the purchase or sale of a
security, commodity or other asset to be in the best interest of one
Portfolio 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 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
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the Adviser considers to be the most equitable and consistent with its
fiduciary obligations to the Fund 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 Directors such annual, quarterly, or monthly reports
as the Board may reasonably request.
(v) The Adviser shall provide the Fund's custodian (the "Custodian")
on each business day with information relating to all transactions
concerning the Portfolios' assets it manages and shall provide the Manager
with such information upon request of the Manager. The Adviser shall
reconcile its records of the Portfolios' 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 material discrepancies
noted and actions taken by the Adviser in response thereto, by the tenth
business day of the following month.
(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.
(b) Services to be furnished by the Adviser under this Agreement may be
furnished by any of its officers or employees.
(c) The Adviser agrees that all records which it maintains for the
Portfolios are the property of the Fund, and the Adviser will surrender
promptly to the Fund any of such records or copies thereof upon the Fund'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.
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(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, within 15 days after the end
of each calendar quarter, a report detailing (i) the average annual total
return of the Portfolios for the preceding quarter and for the preceding
1, 5 and 10 year periods (the "Portfolio Return"); and (ii) a comparison
of the Portfolio Return with the return of an appropriate securities index
and with an appropriate mutual fund peer group. This report or the
information contained therein and as provided by the Adviser to the
Manager is not to be used for marketing purposes or otherwise provided to
the public, including shareholders of the Portfolios.
(f) At least once annually, the Adviser, at its expense, shall require
those of its personnel who are primarily responsible for managing the
Portfolios to make a presentation at such regular or special meeting of
the Fund's Board that the Fund may convene.
2. The Manager shall continue to have responsibility for all services to
be provided to the Portfolios pursuant to the Management Agreement and shall
oversee and review the Adviser's performance of its duties under this Agreement.
3. For the Portfolios, the Manager shall compensate the Adviser for the
services provided and the expenses assumed pursuant to this Subadvisory
Agreement at the following annual rates with respect to the average daily net
assets of each Portfolio managed by the Adviser. This fee will be computed each
calendar day and will be paid quarterly:
For the SP Large Cap Value Portfolio, the Manager will pay the Adviser the
following annual subadvisory fees: 50 basis points for the first $250
million of net assets, 45 basis points for the next $500 million of net
assets, and 35 basis points for net assets over $750 million. For the SP
Small/Mid Cap Value Portfolio, the
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Manager will pay the Adviser the following annual subadvisory fees: 55
basis points for the first $250 million of net assets, 50 basis points for
the next $500 million of net assets, and 40 basis points for net assets
over $750 million.
4. The Adviser shall not be liable for any error of judgment or for any
loss suffered by the Portfolio, 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 Adviser'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 Directors or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Portfolios, or by the Manager or the Adviser at any time, without the
payment of any penalty, on 60 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.
Adviser shall promptly notify Manager in the event that there is a change in the
ownership of Adviser that may constitute an assignment of this 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.
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7. During the term of this Agreement, the Manager agrees to furnish the
Adviser 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 Adviser in any way;
provided, however, that any such item which describes or characterizes the
Adviser's investment process with respect to a Portfolio, the names of any of
its clients (other than the Fund or advisory clients of the Manager 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 twenty-four (24) 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 twenty-four (24) hours after the start of
normal business hours on the next succeeding business day).
8. The Manager acknowledges that the securities holdings of the Portfolios
constitute information of value to the Adviser, and agrees: (1) not to use for
any purpose, other than for the Manager or the Fund, or their agents, to
supervise or monitor the Adviser, the holdings or other trading-related
information of the Portfolios; and (2) not to disclose the Portfolios' holdings
other than as agreed to by the parties in writing, except if required by
applicable law. Further, the Manager agrees that information supplied by the
Adviser, including approved lists, internal procedures, compliance procedures
and any board materials, is valuable to the Adviser, and the Manager agrees not
to disclose any of the information contained in such materials, except to the
Board of Directors and to a limited number of employees of the Manager or its
agents on a "need to know" basis, or as required by law, or as expressly
permitted by the Adviser, in writing, addressed to the Manager.
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9. It is understood that the names of the Adviser and its affiliates and any of
their intellectual property, including trademarks and logos, are the valuable
property of the Adviser and its affiliates, and that the Fund and/or the
Portfolios have the right to use such names (or intellectual property) in
offering materials of the Fund with the approval of the Adviser and for so long
as the Adviser is the portfolio manager to the Fund and/or the Portfolios. Upon
termination of this Agreement, the Fund shall as soon as reasonably possible
cease the use of such names and other intellectual property.
10. Any written notice required by or pertaining to this Agreement shall be
personally delivered to the party for whom it is intended, at the address stated
below, or shall be sent to such party by prepaid first class mail or facsimile.
THE PRUDENTIAL SERIES FUND, INC.
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: General Counsel
If to the Adviser: FIDELITY MANAGEMENT & RESEARCH COMPANY
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
11. 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.
12. 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 as of the day and year first above
written.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
By________________________________
Name:
Title:
FIDELITY MANAGEMENT AND RESEARCH COMPANY
By________________________________
Name:
Title:
