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EXHIBIT (4)(ii)
PRUDENTIAL VARIABLE CONTRACT ACCOUNT-11
Subadvisory Agreement
Agreement made as of this 20th day of April, 2001, between Prudential
Investments Fund Management LLC (PIFM or the Manager) and Prudential
Investment Management, Inc. (the Subadviser or Prudential Investments).
WHEREAS, the Manager has entered into a Management Agreement, dated
April 20, 2001 (the Management Agreement), with the Prudential Variable
Contract Account-11 (the Fund), a diversified open-end management investment
company registered under the Investment Company Act of 0000 (xxx 0000 Xxx),
pursuant to which PIFM will act as Manager of the Fund; and
WHEREAS, PIFM desires to retain the Subadviser to provide investment
advisory services to the Fund, 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 Committee
of the Fund, 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 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 Plan of Operations, Rules and Regulations, Prospectus
of the Fund, and the instructions and directions of the Manager
and of the Committee of the Fund, 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. 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.
(iii) The Subadviser shall determine the securities and
futures contracts to be purchased or sold by the Fund, and will
place orders with
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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 Prospectus or as the Committee of
the Fund 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 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 Committee 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
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 Committee such periodic and
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special reports as the Committee may reasonably request. The
Subadviser shall make reasonably available its employees and
officers for consultation with any of the Committee members,
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 shall provide the Fund's Custodian
on each business day with information relating to all
transactions concerning the Fund's assets, 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 Manager manages the Fund in a manager-of-manager" style,
which contemplates that 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 Committee as to whether the contract with one or more
subadvisers should be renewed, modified, or terminated and
(iii) periodically report to the Fund's Committee 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 Committee
members 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.
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
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discussed above, shall oversee and review the Subadviser's performance of its
duties under this Agreement.
3. 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.
4. For the services provided pursuant to this Agreement, the
Manager shall pay the Subadviser as full compensation therefor, an annual fee
(payable quarterly) equal to 0.06% of the Fund's average daily net assets
under the management of the Subadviser.
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 Committee 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' 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
Committee member, 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 participants, sales literature or other material
prepared for distribution to participants in 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.
9. This Agreement shall be governed by the laws of the State of
New Jersey.
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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:/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Executive Vice President
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
BY: /s/ Xxxx X. Xxxxxxxxxx, Xx.
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Xxxx X. Xxxxxxxxxx, Xx.
President
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