THE PRUDENTIAL SERIES FUND, INC.
SUBADVISORY AGREEMENT
Agreement made as of the ____ day of ____________, 2000, between Prudential
Investments Fund Management LLC (the "Manager"), and INVESCO Funds Group, Inc.
(the "Adviser") a corporation organized under the laws of the State of Delaware.
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 INVESCO Small Company Growth Portfolio of the Fund
(the "Portfolio") in connection with the management of the Fund and to manage
such portion of the Portfolio 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 Portfolio as
2
the Manager shall direct, and shall manage the composition of the
Portfolio, including the purchase, retention and disposition thereof, in
accordance with the Portfolio'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 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 Portfolio's
investments and determine from time to time what investments and
securities will be purchased, retained, sold or loaned by the Portfolio,
and what portion of the assets it manages will be invested or held
uninvested as cash. The Adviser shall vote proxies with respect to the
securities held in the Portfolio, and shall report to the Fund's Board of
Directors with regard to such voting upon request.
(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
Portfolio 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 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.
(iii) The Adviser shall determine the securities, futures,
commodities or other assets to be purchased or sold by the Portfolio, and
will place orders pursuant to its determination 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 Fund's Registration
Statement and Prospectus or as the Directors may direct from time to time.
In providing the Portfolio with investment supervision, it is
3
recognized that the Adviser will give primary consideration to securing
the most favorable price and best execution. 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
be used as broker for securities transactions, but that no formula has
been adopted for allocation of the Portfolio's investment transaction
business. It is also understood that it is desirable for the Fund that the
Adviser 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 best execution. Therefore,
the Adviser is authorized to place orders for the purchase and sale of
securities and commodities or other assets for the Portfolio with such
brokers or futures commission merchants, subject to review by the
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 Adviser in connection
with the Adviser's services to other clients.
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 order to obtain the most favorable price
or lower brokerage commissions and best execution. In such event,
allocation of the securities, commodities or other assets so purchased
4
or sold, as well as the expenses incurred in the transaction, will be made
by the Adviser in the manner 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 periodic and special 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 Portfolio's assets it manages and shall provide the Manager
with such information upon request of the Manager. The Adviser shall
reconcile its records of the Portfolio's 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 through the medium of any of its partners, officers, employees or
affiliates.
(c) The Adviser shall keep the Portfolio's books and records
required to be maintained by the Adviser pursuant to paragraph 1(a)(iv) hereof
and shall timely furnish to the Manager all information relating to the
Adviser'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 Adviser
agrees that all records which it maintains for the Portfolio are the property of
the Fund and the Adviser will surrender promptly to the
5
Fund any of such records 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.
(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 copies of all records
prepared in connection with (i) the performance of this Agreement and (ii) the
maintenance of reports prepared in accordance with the compliance procedures
maintained pursuant to paragraph 1(d) hereof as the Manager may reasonably
request.
(f) The Adviser shall furnish to the Manager, within 15 days after
the end of each calendar quarter, the SEC-standardized 1, 5 and 10 year average
annual total return of the Portfolio compared to the return of an appropriate
securities index and with an appropriate mutual fund peer group.
(g) At least once annually, the Adviser, at its expense, shall
require those of its personnel who are primarily responsible for managing the
Portfolio 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 Portfolio pursuant to the Management Agreement, and shall
oversee and review the Adviser's performance of its duties under this Agreement.
3. For the Portfolio, the Manager shall compensate the Adviser for the
services provided and the expenses assumed pursuant to this Subadvisory
Agreement at the following annual rate: for assets up to $250 million, 0.55% of
the average daily net assets of the Portfolio; for assets in excess of $250
million up to and including $500 million, 0.52% of the average daily net assets
of the Portfolio; and for assets in excess of
6
$500 million, 0.47% of the average daily net assets of the Portfolio. This fee
will be computed daily and paid quarterly.
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 Portfolio, or by the Manager or the Adviser 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. 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 partners, 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.
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,
7
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. 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.
If to Prudential: 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: INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
8
10. 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.
11. 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 FUND MANAGEMENT LLC
By________________________________
Name:
Title:
INVESCO FUNDS GROUP, INC.
By________________________________
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
