EXHIBIT 99.5(f)(i)
PRUDENTIAL XXXXXX FUND
(Stock Index Fund)
SUBADVISORY AGREEMENT
Agreement made as of this 30th day of October, 1996, between Prudential
Mutual Fund Management LLC, a limited liability company, (PMF or the Manager),
and The Prudential Investment Corporation, a New Jersey Corporation (the
Subadviser).
W I T N E S S E T H
WHEREAS, the Manager has entered into a Management Agreement, dated
October 30, 1996 (the Management Agreement), with Prudential Xxxxxx Fund
(formerly The Prudential Institutional Fund) (the Trust), a Delaware business
trust and a diversified, open-end management investment company registered under
the Investment Company Act of 0000 (xxx 0000 Xxx), pursuant to which PMF will
act as Manager of the Trust;
WHEREAS, the shares of beneficial interest of the Trust are divided into
separate series or funds, 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 series or funds or establish and terminate additional series or funds;
WHEREAS, the Manager desires to retain the Subadviser to provide investment
advisory services to Pudential Stock Index Fund (the Fund) in connection with
the management of the Trust 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 Trustees of the
Trust, 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 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
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 Declaration of
Trust, By-Laws and Prospectus of the Fund and the Trust and with the
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 and all other applicable federal and state
laws and regulations.
(iii) The Subadviser shall determine the securities and futures
contracts to
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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 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 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 Trust'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
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merchants, subject to review by the Trustees of the Trust 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, the Trust 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 Trustees of the Trust such periodic and special
reports as the Board may reasonably request.
(v) The Subadviser shall provide the Trust's Custodian on each
business day with information relating to all transactions concerning the
Fund's assets and shall
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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 directors,
officers and employees who may be elected as Trustees or officers of the
Trust 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 Trust's books and records required
to be maintained by the Subadviser pursuant to paragraph 1(a)(iv) 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 Trust required by Rule 31a-1 under the 1940f Act.
The Subadviser agrees that all records which it maintains for the Trust are
the property of the Trust and the Subadviser will surrender promptly to the
Trust any of such records upon the Trust'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)(iv) hereof.
2. The Manager shall continue to have responsibility for all services to be
provided to the Trust 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 reimburse the Subadviser for reasonable costs and
expenses incurred by the Subadviser determined in a manner acceptable to the
Manager in furnishing the services provided in paragraph 1 hereof.
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 Trustees of the Trust 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 Trustee,
officer or employee of the Trust 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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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. 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 Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Secretary; or (2) to the Subadviser at Prudential Plaza,
000 Xxxxx Xxxxxx, Xxxxxx, XX 00000-0000, 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 MUTUAL FUND MANAGEMENT LLC
By /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
President
THE PRUDENTIAL INVESTMENT CORPORATION
By /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. Xxxxxx
Senior Vice President
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