PRUDENTIAL 20/20 FOCUS FUND
AMENDED AND RESTATED MANAGEMENT AGREEMENT
Agreement made this 27th day of April, 1998, as amended and
restated this 23rd day of February, 2001, between Prudential 20/20 Focus
Fund, a Delaware business trust (the Fund), and Prudential Investments Fund
Management LLC, a New York limited liability company (the Manager).
W I T N E S S E T H
WHEREAS, the Fund is a nondiversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the 1940 Act); and
WHEREAS, the Fund desires to retain the Manager to render or
contract to obtain as hereinafter provided investment advisory services to
the Fund and the Fund also desires to avail itself of the facilities
available to the Manager with respect to the administration of its day-to-day
business affairs, and the Manager is willing to render such investment
advisory and administrative services;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Manager to act
as manager of the Fund and as administrator of its business affairs for the
period and on the terms set forth in this Agreement. The Manager accepts such
appointment and agrees to render the services herein described, for the
compensation herein provided. Subject to the approval of the Board of
Trustees of the Fund, the Manager is authorized to enter into a subadvisory
agreement with The Prudential Investment Corporation, Xxxxxxxx Associates
LLC, or any other subadviser, whether or not affiliated with the Manager
(each, a Subadviser), pursuant to which such Subadviser shall furnish to the
Fund the investment advisory services in connection with the management of
the Fund (each, a Subadvisory Agreement). Subject to the approval of the
Board of Trustees of the Fund, the Manager is authorized to retain more than
one Subadviser for the Fund, and if the Fund has more than one Subadviser,
the Manager is authorized to allocate the Fund's assets among the
Subadvisers. The Manager will continue to have responsibility for all
investment advisory services furnished pursuant to any Subadvisory Agreement.
The Fund and Manager understand and agree that the Manager may manage the
Fund in a "manager-of-managers" style with either a single or multiple
subadvisers, which contemplates that the Manager will, among other things and
pursuant to an Order issued by the Securities and Exchange Commission (SEC):
(i) continually evaluate the performance of the Subadviser to the Fund, if
applicable, 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. The
Fund recognizes that a Subadviser's services may be terminated or modified
pursuant to the "manager-of-managers" process, and that the Manager may
appoint a new Subadviser for a Subadviser that is so removed.
2. Subject to the supervision of the Board of Trustees of
the Fund, the Manager shall administer the Fund's business affairs and, in
connection therewith, shall furnish the Fund with office facilities and with
clerical, bookkeeping and recordkeeping services at such office facilities
and, subject to Section 1 hereof and any Subadvisory Agreement, the Manager
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 Fund's SEC registration statement, and subject
to the following understandings:
(a) The Manager (or a Subadviser under the Manager's
supervision) shall provide supervision of the Fund's investments, and
shall determine from time to time what investments or 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.
(b) The Manager, in the performance of its duties and
obligations under this Agreement, shall act in conformity with the
Agreement and Declaration of Trust of the Fund and the Fund's SEC
registration statement and with the instructions and directions of the
Board of Trustees of the Fund, and will conform to and comply with the
requirements of the 1940 Act and all other applicable federal and state
laws and regulations. In connection therewith, the Manager shall, among
other things, prepare and file (or cause to be prepared and filed) such
reports as are, or may in the future be, required by the SEC.
(c) The Manager (or the Subadviser under the Manager's
supervision) shall determine the securities and futures contracts to be
purchased or sold by the Fund and will place orders pursuant to its
determinations with or through such persons, brokers, dealers or futures
commission merchants (including but not limited to Prudential Securities
Incorporated) in informity with the policy with respect to brokerage as
set forth in the Fund's Registration Statement or as the Board of
Trustees may direct from time to time. In providing the Fund with
investment supervision, it is recognized that the Manager (or the
Subadviser under the Manager's supervision) will give primary
consideration to securing the most favorable price and efficient
execution. Consistent with this policy, the Manager (or Subadviser under
the Manager's supervision) 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 other
clients of the Manager (or Subadviser) may be a party. It is understood
that Prudential Securities Incorporated (or a broker-dealer affiliated
with a 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 Manager (or Subadviser) have access to
supplemental investment and market research and security and economic
analysis provided by brokers or futures commission merchants, and that
such brokers or futures commission merchants may execute brokerage
transactions at a higher cost to the Fund than may result when
allocating brokerage to other brokers or futures commission merchants on
the basis of seeking the most favorable price and efficient execution.
Therefore, the Manager (or the
Subadviser under the Manager's supervision) is authorized to pay higher
brokerage commissions for the purchase and sale of securities and
futures contracts for the Fund to brokers or futures commission
merchants who provide such research and analysis, subject to review by
the Fund's Board of Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such broker or futures commission merchant may be
useful to the Manager (or the Subadviser) in connection with its
services to other clients.
On occasions when the Manager (or a Subadviser under the
Manager's supervision) deems the purchase or sale of a security or a
futures contract to be in the best interest of the Fund as well as other
clients of the Manager (or the Subadviser), the Manager (or 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 so 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 Manager (or the Subadviser) in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
(d) The Manager (or the Subadviser under the Manager's
supervision) shall maintain all books and records with respect to the
Fund's portfolio transactions and shall render to the Fund's Board of
Trustees such periodic and special reports as the Board may reasonably
request.
(e) The Manager (or the Subadviser under the Manager's
supervision) shall be responsible for the financial and accounting
records to be maintained by the Fund (including those being maintained
by the Fund's Custodian).
(f) The Manager (or the Subadviser under the Manager's
supervision) shall provide the Fund's Custodian on each business day
information relating to all transactions concerning the Fund's assets.
(g) The investment management services of the Manager to the
Fund under this Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar services to others.
(h) The Manager shall make reasonably available its employees
and officers for consultation with any of the Trustees or officers or
employees of the Fund with respect to any matter discussed herein,
including, without limitation, the valuation of the Fund's securities.
3. The Fund has delivered to the Manager copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) Agreement and Declaration of Trust;
(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 Trustees of
the Fund authorizing the appointment of the Manager 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-1A (the Registration
Statement), as filed with the SEC relating to the Fund and its shares of
beneficial interest and all amendments thereto; and
(e) Prospectus and Statement of Additional Information of the
Fund.
4. The Manager shall authorize and permit any of its officers
and employees who may be elected as Trustees or officers of the Fund to serve in
the capacities in which they are elected. All services to be furnished by the
Manager under this Agreement may be furnished through the medium of any such
officers or employees of the Manager.
5. The Manager shall keep the Fund's books and records required
to be maintained by it pursuant to Paragraph 2 hereof. The Manager agrees that
all records which it maintains for the Fund are the property of the Fund, and it
will surrender promptly to the Fund any such records upon the Fund's request,
provided however that the Manager may retain a copy of such records. The Manager
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 the Manager
pursuant to Paragraph 2 hereof.
6. During the term of this Agreement, the Manager shall pay
the following expenses:
(i) the salaries and expenses of all employees of the Fund
and the Manager, except the fees and expenses of Trustees who are not
affiliated persons of the Manager or any Subadviser,
(ii) all expenses incurred by the Manager in connection with
managing the ordinary course of the Fund's business, other than those
assumed by the Fund herein, and
(iii) the fees, costs and expenses payable to a Subadviser
pursuant to a Subadvisory Agreement.
The Fund assumes and will pay the expenses described below:
(a) the fees and expenses incurred by the Fund in connection
with the management of the investment and reinvestment of the Fund's
assets,
(b) the fees and expenses of Fund Trustees who are not
"interested persons" of the Fund within the meaning of the 1940 Act,
(c) the fees and expenses of the Custodian that relate to (i)
the custodial function
and the recordkeeping connected therewith, (ii) preparing and
maintaining the general accounting records of the Fund and the provision
of any such records to the Manager useful to the Manager
in connection with the Manager's responsibility for the accounting
records of the Fund pursuant to Section 31 of the 1940 Act and the rules
promulgated thereunder, (iii) the pricing or valuation of the shares of
the Fund, including the cost of any pricing or valuation service or
services which may be retained pursuant to the authorization of the
Board of Trustees of the Fund, and (iv) for both mail and wire orders,
the cashiering function in connection with the issuance and redemption
of the Fund's securities,
(d) the fees and expenses of the Fund's Transfer and
Dividend Disbursing Agent that relate to the maintenance of each
shareholder account,
(e) the charges and expenses of legal counsel and independent
accountants for the Fund,
(f) brokers' commissions and any issue or transfer taxes
chargeable to the Fund in connection with its securities and futures
transactions,
(g) all taxes and corporate fees payable by the Fund to
federal, state or other governmental agencies,
(h) the fees of any trade associations of which the Fund may
be a member,
(i) the cost of share certificates representing, and/or
non-negotiable share deposit receipts evidencing, shares of the Fund,
(j) the cost of fidelity, directors' and officers' and errors
and omissions insurance,
(k) the fees and expenses involved in registering and
maintaining registration of the Fund and of its shares with the
Securities and Exchange Commission, and paying notice filing fees under
state securities laws, including the preparation and printing of the
Fund's registration statement and the Fund's prospectuses and statements
of additional information for filing under federal and state securities
laws for such purposes,
(l) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing reports and notices to shareholders in
the amount necessary for distribution to the shareholders,
(m) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of the
Fund's business, and
(n) any expenses assumed by the Fund pursuant to a Distribution
and Service Plan adopted in a manner that is consistent with Rule 12b-1
under the 1940 Act.
7. For the services provided and the expenses assumed pursuant
to this Agreement, the Fund will pay to the Manager as full compensation
therefor a fee at the annual rate(s) as described on the attached Schedule A
with respect to the average daily net assets of the Fund. This fee will be
computed daily, and will be paid to the Manager monthly.
8. The Manager shall not be liable for any error of judgment or
for any loss suffered by the Fund 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 loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
9. 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 with
respect to the Fund at any time, without the payment of any penalty, by the
Board of Trustees 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 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 1940 Act).
10. Nothing in this Agreement shall limit or restrict the right
of any officer or employee of the Manager who may also be a Trustee, 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 dissimilar nature, nor limit or restrict the right of
the Manager to engage in any other business or to render services of any kind to
any other corporation, firm, individual or association.
11. Except as otherwise provided herein or authorized by the
Board of Trustees of the Fund from time to time, the Manager shall for all
purposes herein be deemed to be an independent contractor, and shall have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
12. During the term of this Agreement, the Fund agrees to
furnish the Manager 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 in any way
to the Manager, prior to use thereof and not to use such material if the Manager
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt thereof. In the event of termination of
this Agreement, the Fund will continue to furnish to the Manager copies of any
of the above- mentioned materials which refer in any way to the Manager. Sales
literature may be furnished to the Manager hereunder by first-class or overnight
mail, facsimile transmission equipment or hand delivery. The Fund shall furnish
or otherwise make available to the Manager such other information relating to
the business affairs of the Fund as the Manager at any time, or from time to
time, reasonably requests in order to discharge its obligations hereunder.
13. 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.
14. 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 Gateway Center Three,
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, XX 00000-0000, Attention: Secretary; or
(2) to the Fund at Gateway Center Three, 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000, Attention: President.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. The Fund may use the name "Prudential 20/20 Focus Fund,"
or any name including the word "Prudential" only for so long as this
Agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have
succeeded to the Manager's business as Manager or any extension, renewal or
amendment thereof remain in effect. At such time as such an agreement shall
no longer be in effect, the Fund will (to the extent that it lawfully can)
cease to use such a name or any other name indicating that it is advised by,
managed by or otherwise connected with the Manager, or any organization which
shall have so succeeded to such businesses. In no event shall the Fund use
the name "Prudential 20/20 Focus Fund" or any name including the word
"Prudential" if the Manager's function is transferred or assigned to a
company of which The Prudential Insurance Company of America does not have
control.
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 20/20 FOCUS FUND
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------
Xxxxx X. Xxxxxxx, Xx.
President
PRUDENTIAL INVESTMENTS FUND
MANAGEMENT LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx
Executive Vice President
SCHEDULE A
Prudential 20/20 Focus Fund 0.75% to $1 bil. and
0.70% over $1 bil.
Prudential Index Series Fund 0.30%
Prudential Stock Index Fund
Prudential Natural Resources Fund, Inc. 0.75%
Prudential Sector Funds, Inc. 0.75%
Prudential Financial Services Fund
Prudential Health Sciences Fund 0.75%
Prudential Technology Fund 0.75%
Prudential Utility Fund 0.60% to $250 mil.
0.50% next $500 mil.
0.45% next $750 mil.
0.40% next $500 mil.
0.35% next $2 bil.
0.325% next $2 bil.
0.30% over $6 bil.
Prudential Small Company Fund, Inc. 0.70%
Prudential Tax Managed Funds 0.65% to $500 mil. and
Prudential Tax-Managed Equity Fund 0.60% over $500 mil.
Prudential Tax-Managed Small-Cap Fund, Inc. 0.60%
Prudential U.S. Emerging Growth Fund, Inc. 0.60% to $1 bil. and
0.55% above $1 bil.
The Prudential Investment Portfolios, Inc. 0.65% to $1 bil.
Prudential Active Balanced Fund 0.60% above $1 bil.
Prudential Xxxxxxxx Equity Opportunity Fund 0.60% to $300 mil.
0.575% above $300 mil.
Prudential Xxxxxxxx Growth Fund 0.60% to $300 mil
0.575% next 4.7 bil.
0.55% over $5 bil.
